China Massively Imports Soy and Rapeseed Oil to Grow More

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By Esther Thomas | September 28, 2011 11:23 PM EST

China's massive importation of soybean and rapeseed oil, including palm, is seen to cause a global imbalance in the production and supply chain of the commodity, Hamburg-based researcher Oil World said.

Oil World reported the county's imports in the oilseed sector is reaching worrying proportions as domestic production may have a hard  time keeping up with the demand.

Effective Oct. 1, imports of oils including soybean, rapeseed and palm will grow 10 percent to 10.7 million metric tons, while domestic oil output will expand 3.5 percent to 23.9 million tons.

Oil World further noted that consumption of 17 fats and oils will climb 3.9 percent this year.

The researcher explained the surge in domestic consumption is largely due to population overdrive, income growth as well as diet and lifestyle habits.

This month, soybean futures declined 14 percent on the Chicago Board of Trade on rumors demand for raw materials will fall because of global fiscal fears. ICE Futures Canada in Winnipeg have shown that soybean oil dived 12 percent and rapeseed, or canola fell 9.1 percent.

It was in 2005 when hectares devoted to oilseed cultivation peaked at 29.6 million hectares (73.1 million acres). Oil World said the figure is expected to drop to 27.1 million hectares this year, down 2 percent from a year earlier, owing to competition from other crops and shrinking arable land.

Profits have just likewise been level and manufacture of oilseeds will rise slightly to 51.6 million tons in 2011-2012, it added.

Consumption of food made from oilseeds will hike 5.5 percent to 68.7 million as  the Chinese hog sector grows on rising pork demand, Oil World said.

Oil World is an independent forecasting service for oilseeds, oils and meals.  

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