China has reduced its forecast for edible vegetable oil imports for the current marketing year as surging international prices for palm oil and soyoil boosted import costs, the monthly update to China’s Agriculture Supply and Demand Estimates (Casde) showed on Friday.
The country is now expected to import 7.43 million tonnes of edible oil during the 2021-2022 marketing year, compared with the previous estimate of 8.53 million tonnes in May.
An overview of China’s vegetable oils imports until March 2022
Of the total, palm oil imports for the current marketing year declined 500,000 tonnes from the prior forecast to 4 million tonnes. Rapeseed oil and soyoil imports were estimated to be lower by 200,000 tonnes and 400,00 tonnes, respectively, to 1.3 million tonnes and 800,000 tonnes.
“Affected by the upward shift in the prices of palm oil and soyoil in the international market, the average ranges of import costs of palm oil and soyoil the year have been adjusted accordingly, and China’s import of edible vegetable oil has been reduced to 7.43 million tonnes,” said Casde.
Accordingly, the year-end balance between supply and demand for 2021-2022 edible oil dropped 1.73 million tonnes from May’s report to minus 1.03 million tonnes.
For the new marketing year, estimates for the import and production of vegetable oil were left unchanged at 8.43 million tonnes and 29.25 million tonnes.
For other essential agricultural products, estimates in the report remained unchanged for both the 2021-2022 and 2022-2023 marketing years, although the agricultural authority has noted that import costs for corn and soybeans have jumped on higher international prices.
Estimates for corn production and import for the 2022-2023 marketing year were stable at 272.56 million tonnes and 18 million tonnes, respectively.
“Surplus grains from farmers are almost sold out, and logistics are improved with effective control of Covid outbreaks. (Therefore), current corn supplies in the market are quite ample,” the report said.
On the demand side, feed consumption was edging on stable pig production capacity and a decline in wheat in feedstuff, while industrial demand for the grain was also steady, it added.
For soybeans, Chinese government analysts maintained their outlooks for imports and domestic demand for the 2022-2023 marketing year at 95.2 million tonnes and 112.87 million tonnes.
“We estimate the 2022-2023 global soybeans supply and demand situation to ease,” said Casde.