Vegetable oil prices in China have surged due to a slowdown in soya crushing, triggering large purchases of palm oil, crude soyaoil and canola ahead of the country's Moon Festival in early October.
Traders said on Friday that China had booked a record of about 1 million tonnes of palm oil for July and August combined, and it was considering ordering even rapeseed an oilseed that contains more oil than soyabeans from Canada. "For shipment in July and August, palm oil imports should be close to, if not more than, a million tonnes," said a trader at an international house based in Singapore.
Though an increase in palm oil prices to around $480 a tonne, including cost and freight, had slowed China's buying, there might be scope to sell more for September, the trader said.
Deals for July and August were inked at as low as $430. "At these prices, obviously they're slowing down. But I would say the September programme is not yet finished," he said. The rally in oils prices, including soyaoil, palmoil and rapeseed oil, came ahead of a peak consuming season when China beefs up production of moon cakes to celebrate the Autumn Festival.
Vegetable oil stocks have come down as weak prices for soyameal, used in animal feed, prompted many soya crushers to wind down their operations, while arrivals of crude soyaoil from South America had been low in previous months.
The traders said that though China was not keen on South American crude soyaoil at current prices of about $580 a tonne, including cost and freight, some were considering canola for September shipment, priced around $310 a tonne, cost and freight.
"We've seen some buying interest in the Canadian market by joint ventures for September," said another trader at an international company in Shanghai.
"But I think their purchasing ideas are still $5-10 below the offers." Asked if China was still exporting some rapeseed oil to Europe for biodiesel, the trader said: "After they sold several cargoes for June and July shipment, European buyers lost interest.
Comments
Comments are closed.