Lang
Chinese rapeseed oil prices have witnessed a significant ascent, driven by constrained supply and difficulties for crushers in securing essential raw materials. On August 18, the most actively traded rapeseed oil futures contract on the Zhengzhou Commodity Exchange (CZCE) registered a substantial gain of 3.2%, closing at 10,510 yuan per metric ton.
The upward trajectory in the Chinese market is further bolstered by rising ICE canola futures, which elevate the cost of imported raw materials. While fundamentals for rapeseed oil are noted to remain robust, analysts from Mysteel suggest that prices might stabilize at these elevated levels following the recent sharp rally.
Physical market conditions continue to be exceptionally tight, a direct consequence of inconsistent rapeseed deliveries to processing plants. Industry operating rates are remarkably low, standing at just 29.29%, with mills primarily focused on fulfilling existing contractual obligations. This situation contributes to the notably limited spot availability of rapeseed oil.
Concurrently, the profitability of rapeseed oil imports into China remains poor, making them an unattractive option. Consequently, crushers exhibit minimal interest in pursuing new purchases. Mysteel anticipates that the spot basis for rapeseed oil will maintain its firmness in the near term, ensuring prices persist at their currently high valuations. Source: UkrAgroConsult