Rapeseed oil imports into China are expected to fall further after a trade spat with Canada, its largest exporter, the International Black Sea Oil Trade Conference in Kyiv heard on Thursday.
Canadian exports of China’s second-largest consumed vegoil have fallen 17% this year after China Customs revoked the right of Chinese buyers to import from Canadian exporters in March amid rising diplomatic tensions between the two countries.
“China has forbidden imports of the oil from Canada. The relationship between us (China) and Canada isn’t great because of the trade war as Canada has followed America,” Steven Li Feng Zhou, a senior trader at ECTP said at the International Black Sea Oil Trade Conference in Kyiv on Thursday.
That fall in rapeseed oil volume is expected to continue and comes despite a rise in Chinese import demand for all vegoils after its domestic soybean crush slumped following a fall in soymeal feed demand, constraining the production of soyoil.
The lower soybean crush will result in a loss of 1.4 million mt of domestic soyoil production, which China will have to replace with vegoils sourced from abroad.
Part of that gap will be filled by cheaper palm oil and Argentine soyoil, while consumer preferences toward vegoils from non-GMO oilseeds will make China's need to find replacements for Canadian rapeed oil imports redundant.
“Families want to use either sunflower oil or corn oil. Consumers think that these two oils are healthier and sunoil is non-GMO which is also perceived as better, so demand is going up,” Zhou said.
That will turn rapeseed oil into a “small oil” in China as demand will be replaced by sunoil which is expected to rise 15% year-on-year to nearly 1 million mt by the end of this year.
China consumes around 35 million mt of vegoils annually, of which 41% is soyoil, 24% is rapeseed oil, and 13% is palm oil, while sunoil’s current market share in China is at just 2.5%.
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