China Soy, Rapeseed Oil Imports to Surge as Consumption Gains
29/09/2011 (Bloomberg) - Chinese soybean and rapeseed oil imports are expected to rise as domestic production can’t keep up with demand, Hamburg-based researcher Oil World said.
Imports of oils including soybean, rapeseed and palm will gain 10 percent to 10.7 million metric tons in the year that starts on Oct. 1, Oil World said. Domestic oil output will gain 3.5 percent to 23.9 million tons, according to the report. Consumption of 17 fats and oils will rise 3.9 percent this year, the researcher said.
“China’s import dependence in the oilseed sector is reaching alarming proportions,” Oil World said. “Domestic consumption of oils and fats as well as of oilmeals continues to increase sharply as a result of the population and income growth as well as a change of diets, i.e. a trend towards more meat consumption.”
Soybean futures have dropped 14 percent this month on the Chicago Board of Trade by yesterday on speculation demand for raw materials will decline on fears about the global economy. Soybean oil has dropped 12 percent and rapeseed, or canola, futures on ICE Futures Canada in Winnipeg fell 9.1 percent.
Cultivation Peaked
Area dedicated to oilseed cultivation peaked at 29.6 million hectares (73.1 million acres) in 2005 and is expected to fall to 27.1 million hectares this year, down 2 percent from a year earlier, Oil World said. Yields have been nearly flat and production of oilseeds will increase “marginally’ to 51.6 million tons in the 2011-2012 marketing year, it said.
“The acreage cultivated with oilseeds had peaked 2004-05 and has since trended downward owing to competition from other crops and shrinking arable land,” the researcher said. “Only minor progress was made in achieving higher yields in recent years.”
Consumption of meal made from oilseeds will rise 5.5 percent to 68.7 million as China’s hog sector expands amid rising demand for pork, Oil World said.
“This year’s high domestic prices of pork have prompted a sharp expansion in the pig sector, requiring a corresponding increase in feed consumption,” the researcher said.