Global Markets: Oilseeds – China’s Rapeseed Meal Imports Rise as Seed Imports Decline

Changing dynamics in China’s rapeseed market have resulted in a slowing of rapeseed imports and a hastening of rapeseed meal purchases in CY2016. In the first quarter of MY2016/17 alone, China rapeseed meal imports have reached 150,000 tons, mostly from Canada, compared to 5,000 tons in Q1 of MY2015/16.

In comparison, rapeseed imports in the first quarter of MY 2016/17 came in around 600,000 tons, which is a 40 percent decrease from the same time period in MY2015/16.

Uncertainty over possible import restrictions, higher prices relative to competing oilseeds, and the availability of domestic stocks have contributed toward China’s slowdown of rapeseed imports. Additionally, the ongoing auction of rapeseed oil state reserves, which has reached 1.3 million tons since October 2016, has also dampened the demand for imported rapeseed.

Also, growing demand from the livestock sector, combined with a lower rapeseed production and crush, has constrained local supplies of rapeseed meal. This has heightened the demand for imported meal, with imports soaring over 300 percent to more than half a million tons over the past 12 months.

On an October/September marketing year basis, rapeseed imports remain depressed at a 5-year low, with October 2016 – January 2017 arrivals estimated at 850,000 tons. This trend toward lower rapeseed imports and higher purchases of rapeseed meal is expected to continue through MY2016/17 (Oct-Sep), supporting USDA’s forecast of China rapeseed imports at 3.6 million tons.

In contrast, China’s soybean imports from October 2016 to December 2016 came in healthy around 22.0 million tons, slightly outpacing the first quarter of MY2015/16 (Oct-Sep basis). Soybean crush between October 2016 and December 2016 also rose to 22.4 million tons, a 5 percent increase over the same time last year, satisfying strong demand for protein feed and offsetting reductions in DDGS imports and lower rapeseed meal production.

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