SunSirs: Agriculture, Rapeseed Oil 2019 Yearly Report

1. Price Trend

According to data from SunSirs, the price of rapeseed oil has increased many times in 2019, mainly at high levels. The average price at the beginning of the year was 6,170 RMB/ton, and the average price at the end of the year was 7,962 RMB/ton, up 29.05%.

The First Stage (January to June)

The price of vegetable oil fluctuated steadily. The highest average price was 7,222 RMB/ton, up 17.06% from the beginning of the year.

To welcome New Year and Spring Festival, Chinese get used to stocking before the holiday in early January. Driven by such custom, the price of vegetable-made oil increased slightly.

The sharp increase in rapeseed oil prices occurred in March.

China-Canada Trade

Due to quality problems on Canadian rapeseed, China restricted Canadian rapeseed imports, and rapeseed imports declined.

The import volumes in January and February were 650,000 tons and 420,000 tons, respectively. The month dropped sharply to 145,000 tons.

At the same time, national stocked rapeseed oil has basically been consumed.

Data show that national stocked rapeseed oil has dropped from a maximum of 6 million tons in 2014/2015 to about 150,000 tons in 2017/2018.

In addition, 80,000 tons of vegetable oil is auctioned on June 17, 2019.

On June 24, 28,000 tons were auctioned.

All of them were completely sold.

The market is worried that the supply of rapeseed oil will decrease in the later stage, and the spot price of rapeseed oil will rise sharply.

China-Canadian relations are in a sensitive period. Imported rapeseed is limited.

Domestic Production Enters into Off-Season.  

Meanwhile, domestic new season rapeseeds are expected to be listed in the middle and late May. At present, there are few sources of stale rapeseeds. Domestic rapeseeds are in a period of green and yellow condition. The supply of raw materials is worried.

The price of rapeseed oil is in strong operation.

Short Summary For The First Stage

Up to June 7, the trading volume of rapeseed oil in coastal oil milling factory was only 25 thousand tons, which was a week-on-month decrease of 73.4%.

This was the second transaction in the past two months.

From January 1, 2019 to present, the cumulative turnover was 215.41 million tons, a decrease of 48.74% over the same period last year.

Rapeseed oil demand is weak, limiting its upward adjustment space.

The Second Stage (July to September)

The price of rapeseed oil rose sharply. The highest average price was 7,635 RMB/ton, up 23.74% from the beginning of the year.

Rapeseed oil has been boosted by multiple favorable factors, and prices have continued to rise. Affected by the tension between China and Canada, the amount of imported rapeseed has decreased.

Meanwhile, the domestic temporary storage of vegetable oil has basically been sold. 

Therefore, the spot prices of soybean oil and palm oil have soared, helping the price of rapeseed continue to rise.

In addition, Schools have begun one after another. Their stocks increased in Mid-Autumn Festival and Double Eleven, and vegetable oil consumption was considerable.

Up to August 9, coastal rapeseed stocks were 345,000 tons, a year-on-year decrease of 45%, which is positive for the increase in rapeseed oil prices.

At the end of September, double-stock preparations were nearing completion, and market demand slowed.

At the same time dragged down by crude oil, the overall oil market fell.

The Third Stage (Sine October)

In the third stage, vegetable oil rose again at the end of October, with the highest average price of 7,962 RMB/ton, and the price increased by 29.05% compared with the beginning of the year.

In the second half of the year, Malaysia’s main producer of palm oil continued to reduce production.

In addition, Indonesia's raw fuel oil plan stimulated demand, palm oil led to rising oil prices.

Plus, Chinese domestic soybean oil stocks continued to decline.

Up to December 3, domestic port soybean oil stocks had fallen to 915,000 tons, down 29.62% from 1.3 million tons in mid-July.

Up to December 6, the stock of rapeseed oil in the coastal areas was reported at 67,200 tons, a decrease of 08,200 tons from the previous week.

The inventory in East China was 279,900 tons, a decrease of 0.3 tons, and the outstanding contracts in the coastal areas were reported at 84,000 tons, a month-on-month increase of 26,500 tons.

Due to the tight supply of raw materials, the start-up rate will remain low in December, and the number of unexecuted contracts will increase significantly.

The high price of rapeseed oil has limited its demand to a certain extent.

Additionally, according to the industry publication "World of Oil" in Hamburg, Germany, the global rapeseed production in 2019/20 is expected to be only 61.8 million tons, which is at least 2.8 million tons lower than the previous year.

2. Market Forecasting

In the context of global rapeseed production reduction, coupled with the approaching holiday season, the market is actively stocking. SunSirs’ analysts of rapeseed oil analysts predict that rapeseed oil may fluctuate strongly.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com