Casde: China cuts 21/22 edible oil output, imports on high prices

China has reduced its forecast for edible vegetable oil production and imports for the 2021/22 marketing year on higher international prices and lower import margins, the monthly update to China's Agriculture Supply and Demand Estimates (Casde) showed on Tuesday.

China's marking year for vegetable oil, corn and soybean runs from October to September.

The country is expected to produce 27.52 million mt of edible vegetable oil in the 2021/22 marketing year, down 160,000 mt from the previous estimate.

The cut came from lowered rapeseed oil production, with a decline of 160,000 mt from last month's outlook to 5.78 million mt.

Imports of edible vegetable oil for the current marketing year are pegged at 5.93 million mt, compared with 6.6 million mt estimated in August.

Of the total, rapeoil and soyoil imports for 2021/22 were cut by 300,000 mt and 70,000 mt from their previous outlooks to 1 million mt and 380,000 mt respectively.

"China's imports of rapeseed and edible vegetable oil in 2021/22 were lower than the estimates in the previous month, on high prices of vegetable oil in the international market and low import profits," the agency said.

Consumption of edible vegetable oil was expected to be stable at 36.34 million mt.

Accordingly, the year-end balance between supply and demand for 2021/22 edible oil dropped 820,000 mt from the previous estimates to -3.16 million mt.

Chinese government analysts have maintained unchanged estimates for edible oil production and imports of 29.25 million mt and 8.43 million mt respectively.

For other essential agricultural products, estimates in the report remained unchanged for both the 2021/22 and 2022/23 marketing years.

Estimates for corn production and imports for the next marketing year were stable at 272.56 million mt and 18 million mt.

"Although continuous high temperature and lack of rain had a certain impact on corn yield in southern Shaanxi and the Sichuan Basin, the area was limited, and the overall impact was not significant," the report said.

On the demand side, "corn industry consumption is weak, as deep processing industry is suffering from widespread losses… (while) feed demand is expected to increase, as breeding profit rebounded and wheat usage in feed substitution declined," said Casde.

Corn imports and production in the 2021/22 marketing year went unchanged at 20 million mt and 272.55 million mt.

For soybeans, China's Ministry of Agriculture and Rural Affairs (MARA) also kept its forecasts for imports and production for the new crop year at 95.2 million mt and 19.48 million mt.

Soybean consumption for 2022/23 remained at 112.87 million mt, leaving the year-end balance between supply and demand unchanged at 1.66 million mt.