SunSirs: 2023 China Rapeseed Meal Rebounded and 2024 Forecasts

From the data monitoring system of SunSirs, it can be seen that the overall domestic rapeseed meal market in 2023 has shown a trend of rising and then falling. At the beginning of 2023, the domestic rapeseed meal market price was 3,354 RMB/ton, and at the end of the year, the market price was 2,971 RMB/ton, a decrease of 11.40% within the year. The highest point occurred in August when the average price was 4,066 RMB/ton.

Phase 1: From January to March, there was a volatile decline. The global rapeseed production in 2022/2023 was 87.3 million tons, a year-on-year increase of 12.4 million tons. From January to March 2023, there was a significant increase in domestic imported rapeseed compared to the same period last year, and oil factories started operating higher, leading to an expected increase in rapeseed meal supply. The inventory of rapeseed meal continues to rise. After the Spring Festival, there is a demand for replenishment at the breeding terminal. Due to the large price difference of soybean and rapeseed meal, the advantage of rapeseed meal substitution is obvious, which to some extent supports rapeseed meal. Aquaculture is in the off-season, and demand for rapeseed meal is weak.

Phase 2: Continuously rising from April to August. In June, the USDA monthly report released a decrease in US bean planting area, coupled with the impact of El Niño weather in the third quarter on global climate imbalance, serious concerns about reduced oil production, and a rise in rapeseed meal prices. In terms of demand, aquaculture resumed in April and entered the peak season, supporting the rise in rapeseed meal prices.

Phase 3: Continuous decline from September to December. There is a strong expectation of an increase in imported rapeseed supply from September to December, with loose expectations for rapeseed meal supply. After entering September, the temperature gradually decreases, and the peak season for aquaculture comes to an end. The demand for rapeseed meal is sluggish, with supply increasing and demand decreasing, suppressing the continuous decline of the rapeseed meal market. Canadian rapeseed CNF prices continue to fall, import costs have decreased, and domestic rapeseed meal prices have fallen negatively.

2024 forecast:

Supply: The global rapeseed production in 2022/2023 is 87.3 million tons, a year-on-year increase of 12.4 million tons. The global rapeseed supply in 2022/2023 is loose, and the import window profit has opened up. The imported raw material rapeseed has significantly increased, and domestic oil factories are showing an upward trend in operation. The supply of rapeseed meal is loose. The USDA December report shows that global rapeseed production in 2023/2024 is 86.98 million tons, a year-on-year decrease of 2.07%, and the reduction in production is narrowing. According to data statistics, the total soybean production in South America is expected to reach 220 million tons in 2023/24, an increase of nearly 28 million tons from the previous year, reaching a new historical high. The possibility of loose global oil supply is high, which is suppressing the rapeseed meal market.

Imports: From January to November 2023, the domestic import of rapeseed reached 4.7525 million tons, a significant increase of 235.79% year-on-year. From January to November 2023, China imported 2.0929 million tons of rapeseed meal, an increase of 5.25% year-on-year. The estimated arrival volume of rapeseed in the first quarter of 2024 is 1.7 million tons, compared to 1.66 million tons in the same period of 2023 and only 380,000 tons in the same period of 2021. The domestic rapeseed supply pattern remains tolerant and unchanged.

Demand: Aquaculture in the first quarter of 2024 is in the off-season, with a slowdown in market procurement enthusiasm, weakened rigid demand, and sluggish market demand. In the first quarter of 2024, South American soybeans were in the growth period, and the expected high yield of South American soybeans was expected to rise, dragging down the rapeseed meal market. During the off-season of rapeseed meal demand, it mainly follows the fluctuations in the soybean meal market. The supply and demand of rapeseed meal itself are weak, and SunSirs believes that rapeseed meal may continue to fluctuate in the first quarter, with a narrow range and weak operation as the main trend.

The trend of rapeseed meal market in the past four years can be seen that in the context of a significant increase in imported raw materials in 2023, the trend was relatively weak compared to 2022. In the first quarter of 2024, the domestic supply and demand situation caused by a large amount of imported rapeseed in 2023 was faced, and the first quarter was in the off-season of rapeseed meal consumption. On the other hand, in the context of abundant soybean production in South America, it is expected that rapeseed meal will fluctuate narrowly and weakly in the short term.

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