Vegetable oil prices to keep sliding in China in short run
Monday, 15 September 2008
BEIJING, Sept.14 (Xinhua): Vegetable oil prices on China market may keep falling in the near future due to a number of unfavorable factors on the domestic market.
First, the spending spree on vegetable oils has not come as expected with the approaching of the Autumn Festival and National Day, falling on September 14 and October 1 respectively. Insufficient demand may suppress the market price.
Second, large imports of soybean and edible oil plus routine operation of oils and fats processors have led to oversupply.
According to customs statistics, China's monthly soybean import stayed above 3 million tons from June to August, peaking at 3.83 million tons in August. The import totaled 24.56 million tons from January to August, up 24 per cent year on year.
The import of edible vegetable oil came to 580,000 tons in August and amounted to 5.39 million tons for the January-August period, up 4. 7 per cent year on year.
Meanwhile, domestic oils and fats processors maintain operation as usual, leading to surplus of soybean dregs and soybean oil. As a result, some companies resort to inventory transfer for sales.
Thirdly, along with continuous decline of the future price of crude oil on the international market, Malaysian palm oil keeps sliding, which drives down palm oil price on domestic market. Malaysia exported 1.47 million tons of palm oil in August, up 4.6 per cent from 1.4 million tons in July. It produced 1.59 million tons of palm oil in the same month, up 2.5 per cent over July.
Carry-over stock of palm oil amounted to 1.85 million tons at end-August, down 6.5 per cent from end-July, according to statistics release reently by Malaysian Palm Oil Board.
As the weather turns cool, demand for refined palm oil weakens. Currently, the port inventory of palm oil has reached 450, 000 tons.
Fourthly, anticipation of sharp rise in soybean output in China will depress the soybean oil price.
According to statistics from the National Grain and Oil Information Center, the sown area of soybean in China reached 9.65 million hectares in 2008, up 0.95 million hectares or 10.92 per cent from last year.
It's projected China's soybean output will come to 17.5 million tons this year, up 36.72 per cent or 4.7 million tons more than last year. Based on the aforesaid factors, China's vegetable oil price may continue to drop in the short term.
First, the spending spree on vegetable oils has not come as expected with the approaching of the Autumn Festival and National Day, falling on September 14 and October 1 respectively. Insufficient demand may suppress the market price.
Second, large imports of soybean and edible oil plus routine operation of oils and fats processors have led to oversupply.
According to customs statistics, China's monthly soybean import stayed above 3 million tons from June to August, peaking at 3.83 million tons in August. The import totaled 24.56 million tons from January to August, up 24 per cent year on year.
The import of edible vegetable oil came to 580,000 tons in August and amounted to 5.39 million tons for the January-August period, up 4. 7 per cent year on year.
Meanwhile, domestic oils and fats processors maintain operation as usual, leading to surplus of soybean dregs and soybean oil. As a result, some companies resort to inventory transfer for sales.
Thirdly, along with continuous decline of the future price of crude oil on the international market, Malaysian palm oil keeps sliding, which drives down palm oil price on domestic market. Malaysia exported 1.47 million tons of palm oil in August, up 4.6 per cent from 1.4 million tons in July. It produced 1.59 million tons of palm oil in the same month, up 2.5 per cent over July.
Carry-over stock of palm oil amounted to 1.85 million tons at end-August, down 6.5 per cent from end-July, according to statistics release reently by Malaysian Palm Oil Board.
As the weather turns cool, demand for refined palm oil weakens. Currently, the port inventory of palm oil has reached 450, 000 tons.
Fourthly, anticipation of sharp rise in soybean output in China will depress the soybean oil price.
According to statistics from the National Grain and Oil Information Center, the sown area of soybean in China reached 9.65 million hectares in 2008, up 0.95 million hectares or 10.92 per cent from last year.
It's projected China's soybean output will come to 17.5 million tons this year, up 36.72 per cent or 4.7 million tons more than last year. Based on the aforesaid factors, China's vegetable oil price may continue to drop in the short term.