Increased supply of canola from Canada to China will increase the decline in prices for rapeseed oil

According to China News, in November, China’s refineries began to receive large shipments of Canadian canola, which sharply increased the supply of rapeseed oil and reduced demand prices.

Due to the increase in imports of rapeseed to China in October, its stocks as of November 17 rose to 421 thousand tons, which is 368% higher than on November 3.

Imports of rapeseed oil in the country in October increased compared to September by 64.08% to 233 thousand tons, which is the second largest monthly imports this year, then the largest deliveries were recorded in April. As a result, the stocks of rapeseed oil increased by 5.64% to 395.1 thousand tons over the last week.

As of November 24, the average price of imported third-grade rapeseed oil amounted to 8794 yuan/t or 1230 $/t, which is 2.25% lower than in October. In the domestic market, there is an oversupply of rapeseed oil, which, amid negative trends in the global market, continues to lower prices for imported rapeseed oil.

Imports of rapeseed oil will remain quite active in the coming months. According to forecasts, in November-December it will amount to 1 mln tonnes, which is 2.2% lower than in 2022. However, amid the decline in demand and forecasts of higher soybean production in Brazil, the prices of imported rapeseed oil will continue to fall in December.

In Canada, canola is trading at a stable level of 702 CAD/t or 517 $/t (-1.1% per week, +2.2% per month), which exceeds the price of Australian canola, which is offered at 500 $/t FOB, and European and Ukrainian rapeseed, which is offered at 475 $/t FOB and 400 $/t FOB, respectively.

The Decrease in demand for rapeseed oil from China amid increasing supply of canola of the new harvest from Australia in the near future will continue to lower prices for rapeseed and rapeseed oil, especially in the case of favorable for the development of soybean crops weather in Argentina and Brazil.

Tags: China, Canada, rapeseed, Australia