China edible oil imports surge

China, one of the world's top edible oils consumers, is set to buy 15-20 percent more foreign oils this year as farmers plant more grains instead of oilseeds due to Beijing's policies and higher prices.
Some traders and analysts said the 2007 rapeseed crop, to be harvested in May, might not even reach 9 million tonnes. The crop for 2006 is seen at less than 10 million tonnes despite an official estimate of 12.7 million tonnes.
Chinese exports of biodiesel or rapeseed oil for the fuel production in Europe were also adding to the country's shortage, spurring imports of palm oil, the world's cheapest vegetable oil.
"If you look at the past two years, China is shifting: The acreage's for oilseeds are on the decline because of higher grain prices," said a senior trader at an international company. "Demand for vegetable oils is going up. Although more soya is being crushed, China still needs to import more vegetable oils."
The trader sees China's combined imports of palm oil and soyaoil climbing by about 15 percent this year. Worried over China's food security, Beijing has encouraged farmers to grow more grains over the past few years, helped also by a surge in grains prices to 10-year highs late in 2006 following an explosive expansion in the ethanol industry.
Zhang Lewis, an analyst at the state-owned China National Grain and Oils Information Centre, or CNGOIC, expects oil imports to rise 19 percent to about 8.00 million tonnes, including 6 million tonnes of palm oil and 1.8 million tonnes of soyaoil.
China's palm oil imports climbed 27.6 percent to 580,000 tonnes in the first two months this year, while soyaoil imports rose 19.6 percent to 360,000 tonnes, according to preliminary February customs data. Rapeseed oil imports totalled 53,696 tonnes in the two months, up sharply from just 69 tonnes in the same 2006 period.
Rapeseed oil prices hit record highs of above 8,000 yuan ($1,033) per tonne in January ahead of the Lunar New Year festivals, due to a smaller 2006 crop and demand from biodiesel plants.
"The last local crop was much lower than the official figure," said one trader in Shanghai. "We believe it was below 10 million tonnes.