Canola and soybean oil prices supported by Trump's threats to halt imports of used cooking oil from China

US President Trump continues to seek leverage over China in the trade war, saying on Tuesday that Washington is considering halting purchases of used cooking oil from China unless it resumes purchases of American soybeans. This supported soybean and canola oil prices.

Used cooking oil (UCO) is a raw material collected after use in cafes and restaurants, which is commonly used to produce biofuels. Earlier this year, the Trump Administration already cut subsidies for biofuel production from imported recycled oil from China and canola oil from Canada by 50%, incentivizing the use of only American-origin cooking oils in biofuel production.

In 2024, China sold a record 1.27 million tons of used cooking oils to the United States worth $1.2 billion, but after Beijing abolished export tax breaks from December 1, 2024, in the first seven months of 2025, shipments from China to the United States amounted to about 387 thousand tons, which is 43% lower than the corresponding figure of the previous year.

December soybean oil futures on the Chicago Board of Trade yesterday rose only 0.9% to $1,120/t (-1.4% for the week and -4.3% for the month), not receiving strong support from Trump’s statements and data on the growth of soybean processing in the US.

According to the NOPA association, in September, the volume of soybean processing in the US increased by 4.3% compared to August to 5.385 million tons, which is 11.6% higher than in September 2024. This indicates an increase in domestic processing against the background of growing demand from the biofuel industry.

On the North American market, November canola futures rose by 2% in two sessions to 620 CAD/t or $442/t (+0.5% for the week and -3.2% for the month), amid statements by Trump and the Chinese ambassador to Canada, who said that China is ready to lift the ban on canola imports from Canada if the latter’s government removes tariffs on electric vehicles from China.

Relations between Washington and Beijing have been tense for years, especially during the Trump presidency. The parties have differences on issues such as tariffs, technology, human rights, the origin of the COVID-19 pandemic, as well as Hong Kong, Taiwan and Ukraine, so markets do not expect a quick resolution of the US-China trade dispute and the resumption of active soybean exports to China. More likely, China will resume canola imports from Canada to fill the need and partially replace soybeans with canola.