USDA predicts a doubling of sunflower oil imports from Ukraine and the Russian Federation to China in 2022/23

China's vegetable oil production will grow from 28.4 million tonnes in FY 2022/23 to 29 million tonnes in FY 2023/24, thanks to increased production of soybeans, canola and peanuts, according to USDA's FAS report on oilseed markets.

Soybean oil remains the main domestically produced vegetable oil in China. In FY 2023/24, its share in the total production of vegetable oils will be 58.7%, while the share of rapeseed oil is 24.1%, and peanut oil is 11.3%.

The consumption of vegetable oils in China in 2023/24 MR will grow by 2% compared to the previous season to 36 million tons.

Imports of vegetable oils to China in FY 2023/24 are estimated at 11.27 million tons, in particular palm oil imports will grow to a record 7.1 million tons amid lower prices and stronger demand from the food industry.

Imports of sunflower oil, mainly produced in Ukraine and the Russian Federation, will grow to 1.1 million tons in FY2022/23, compared to 500,000 tons in FY2021/22, when the war in Ukraine disrupted supply chains. In the first quarter of 2022/23 MR, the import of sunflower oil increased compared to the same period of 2021/22 MR by 1.5 times to 300 thousand tons. In 2020/21 MR and 2021/22 MR, the import of sunflower oil amounted to an average of 1.7 million t per year.

The continuation of the operation of the grain corridor can significantly restore the supply of sunflower oil from Ukraine to China, especially against the background of a decrease in the price of sunflower oil to a level lower than that of palm oil, although the quality of sunflower oil is much better than soybean and palm oil.