China’s soyabean oil exports to India surge due to weak demand alongside an increase in domestic stocks

According to customs data, China shipped a record 70,877 tonnes of soyabean oil in October, the bulk of it to India. Exports in the first 10 months of this year reached 329,000 tonnes, almost triple the volume for the full previous year.

High volumes of soyabeans imports from South America alongside a stagnating local economy were forcing Chinese soyabean oil processors to seek new markets, the 25 November report said.

Increased trade between China and India made logistical sense, Aashish Acharya, a vice president at Patanjali Foods, one of the country’s top vegetable oil buyers, was quoted as saying.

“Quality is comparable with South American supplies, prices are competitive and Chinese exporters are seeking reliable buyers,” he said.

At the time of the report, Chinese soyabean oil was trading at US$10/tonne compared to US$15/tonne from South America and could reach India’s east coast in about 10-12 days, compared with the 50- to 60-day journey from Brazil and Argentina, Acharya said.

Soyabean oil imports from China totalled about 70,000 tonnes to November and could increase by another 12,000 tonnes by the month’s end, he said.

China is the world’s biggest producer of soyabean oil, producing around 20M tonnes/year.

Traditionally, it consumed almost all that output domestically, often having to also import to meet local demand, the report said.

However, as the economy had cooled, people had cut back on eating out, leading to reduced soyabean oil demand from restaurants.

Commercial stockpiles totalled more than 1M tonnes in mid-November, a seven-year high for that time of year, commodities consultancy Mysteel said in a note.

Chinese crushers were expected to maintain high levels of activity and it would take time for local demand to recover, it said.

Meanwhile, China had continued to import US soyabeans, although traders remained cautious if the country would place the higher levels of shipments that were expected this year, the report said.

Tags: China, exports, India, imports, stockpiles, demand, soyabean oil