China, the world's biggest vegetable oil consumer, will import more soybeans and palm oil to meet growing demand after local farmers reduced oilseed plantings, bolstering prices that have risen by half this year.
China's imports will account for 45 percent of international soybean trade volume in the year to September 30, 2008, Wang Yinji, deputy general manager of Cofco Ltd, said in remarks prepared for a speech yesterday in Guangzhou. That's almost twice as much as the 25 percent of trade China's imports accounted for seven years ago.
"Chinese mainland's vegetable oil consumption will rapidly rise for a few years," because per capita consumption of 17 kilograms a year is below the world average, Wang said.
That compares with 25 kilograms in Taiwan, which has a similar diet structure, and nearly 40 kilograms in the US, he said.
Chinese buying helped push up the price of soybeans traded in Chicago by 56 percent this year to touch a 19-year high this month, and aided palm oil's 49 percent advance to a record in Malaysia. Demand for the cooking ingredients grew 6.8 percent a year for the past 12 years in China, the world's most populous nation, three times faster than in the US, Wang said.
Vegetable oil shipments to China will account for about a fifth of such trade in the 2007-8 marketing year, he said. Soybeans will continue to be China's largest source of edible oils, rising to 41 percent of total supply by 2010-11, up from 37 percent now, Wang said. Palm oil will jump to 31 percent from 21 percent, he said.
Economic growth tends to increase vegetable oil consumption because improved living standards encourage people to eat more oil-rich foods, Wang said. China's gross domestic product per capita is set to double by 2010, compared with 2000, he said.
A key factor driving consumption is China's rapid urbanization, because city dwellers use more cooking oil than farmers, said Cheng Guoqiang, a deputy director at the Development Research Center of China's State Council.
"It's not just vegetable oils, China's demand for all agricultural products is entering a fast-expanding phase," Cheng said at the same conference.
Soybean, palm oil and rapeseed oil will make up 88 percent of China's total supply in 2011, compared with 78 percent, according to Wang. Rapeseed oil's market share is set to decline to 16 percent from 20 percent.
(Shanghai Daily November 21, 2007)