20/11/2007 (International Herald Tribune), Guangzhou - China, the biggest vegetable oil consumer in the world, will import more soybeans and palm oil to meet growing demand after local farmers reduced oilseed plantings, bolstering prices that have risen by half this year.

China's imports will account for 45 percent of international soybean trade volume in the year to Sept. 30, 2008, Wang Yinji, the deputy general manager of Cofco, said in remarks prepared for a speech Tuesday in Guangzhou. That is almost twice as much as the 25 percent of trade Chinese imports accounted for seven years ago.

"China's vegetable oil consumption will rapidly rise for a few years," because per capita consumption of 17 kilograms, or 37 pounds, a year is below the world average, Wang said. That compares with 25 kilograms in Taiwan, which has a similar diet structure, and nearly 40 kilograms in the United States, he said.

Chinese buying helped push up the price of soybeans traded in Chicago by 56 percent this year to touch a 19-year high this month, and aided palm oil's 49 percent advance to a record in Malaysia. Demand for the cooking ingredients grew 6.8 percent a year for the past 12 years in China, the most populous nation, three times faster than in the United States, Wang said.

Vegetable oil shipments to China will account for about a fifth of such trade in the 2007-8 marketing year, he said.

Soybeans will continue to be the largest source of edible oils in China, rising to 41 percent of total supply by 2010-11, up from 37 percent now, Wang said. Palm oil will jump to 31 percent from 21 percent, he said.

Economic growth tends to increase vegetable oil consumption because improved living standards encourage people to eat more oil-rich foods, Wang said. Gross domestic product per capita in China is set to double by 2010, compared with 2000, he said.

A key factor driving consumption is rapid urbanization, because city dwellers use more cooking oil than farmers, said Cheng Guoqiang, a deputy director at the Development Research Center of China's State Council.

"It's not just vegetable oils, China's demand for all agricultural products is entering a fast-expanding phase," Cheng said at the same conference.

Soybean, palm oil and rapeseed oil will make up 88 percent of the total supply in China in 2011, according to Wang. Rapeseed oil's market share is set to decline to 16 percent from 20 percent, he said.

The domestic supply of oilseeds "fell sharply" this year because the area planted declined, Wang said. Soybean output dropped 20 percent from a year ago and rapeseed fell 25 percent, Wang said without providing detailed figures.

The gap between annual domestic output and demand for vegetable oils will expand by 2 million metric tons in the year through September 2011, compared with the 12 months ended Sept. 30 this year, Wang said.

The government this year introduced policies, including raising subsidies, to restore plantings, he said. The level of output may recover to the level in 2003 and rise by 3 percent every year by 2010, while the rate of increase will not be enough to stem the rising imports, he said.

Vegetable oil imports in China rose 27 percent in the first 10 months of this year from a year earlier, according to customs data. Imports of vegetable oil were seven million tons in January to October. Imports of soybeans grew 4.5 percent in the first 10 months to 24.5 million tons.