Rapeseed oil prices in China surge amid raw material supply problems
Rapeseed oil prices in China rose sharply amid limited supply and difficulties in securing raw materials for crushers. On August 18, the most-traded rapeseed oil futures contract on the CZCE gained 3.2% to 10,510 yuan/t.
The Chinese market is also being supported by higher ICE canola futures, which are increasing the cost of imported raw materials. According to Mysteel, fundamentals for rapeseed oil remain strong, although prices could consolidate at high levels following the sharp rally.
The physical market remains tight due to unstable rapeseed supplies to crushers. The industry operating rate stands at only 29.29%, while mills are mainly fulfilling previously signed contracts. Spot availability of rapeseed oil remains relatively limited.
Meanwhile, rapeseed oil imports into China remain unattractive due to poor margins, while crushers show little appetite for new purchases. Mysteel expects the spot basis for rapeseed oil to remain firm in the near term, with prices staying at elevated levels.
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