Rapeseed Oil Price Declined in China due to low Demand and Supply
- 19-Aug-2022 3:33 PM
- Journalist: Nina Jiang
On Tuesday, August 16: Given that China is one of the world's major producers of rapeseed and its largest importer, demand for rapeseed oil, along with other vegetable oils, has recently declined as a result of decreased food consumption and every so often lockdowns brought on by COVID-related limitations in the nation.
The spot market's average price for rapeseed oil fell to 12,800 RMB per tonne (about USD 1990 per tonne) in China's domestic market on August 16, Tuesday. Rapeseed oil futures decreased by 4.32%, while the price of rapeseed oil in the spot market remained low all week. The price of international crude oil also dropped significantly, which caused the domestic oil market to decline. As a result, the United States Department of Agriculture (USDA) reported a downward trend in oil prices. The import volume of rapeseed oil remained at its lowest level, and the availability of rapeseed oil was limited, supporting the price even more.
Rapeseed oil is extensively utilized in various industries and food production due to its low cost and accessibility owing to its worldwide output. Germany comes in second place behind Canada as the world's top rapeseed oil producer. In 2022–2023, Australia's production and other nations increased significantly due to the terrible Canadian crop's high rapeseed prices. Production is now about 15% higher on a year-on-year basis in 2022, with Canada's harvest damaged by the drought last year.
Although, Canada has now reclaimed its position as the top producer in 2022–2023, surpassing China and the European Union. Given that the world's rapeseed trade shrank in 2021–2022, the increase in global rapeseed production in 2022–2023 is extremely crucial. Rapeseed supplies are expected to be plentiful in Canada this year (2022–2023), likely leading to an increase in demand worldwide, particularly from China. In 2021, due to political unrest, China stopped purchasing from Australia and began relying on Canada to provide for its needs.