Anticipating 2014 Palm Oil Price Direction:
China Oils and Fats Demand Analysis 2014 - Demand Outlook for Palm Oil
Mr. Cao Zhi
Mr. Cao Zhi is the Head of Market Intelligence Department of National Grain and Oil Information Center and a Senior Economist who has been conducting research on oils and fats, oilseeds and cereals market for many years. He is in charge of many research reports in National Grain and Oil Information Center and gave more than 100 papers in past several years. His researches won many awards from National Development and Reform Commission and State Administration of Grain. He was invited to be the expert in the expert group of Ministry of Agriculture. Mr. Cao Zhi has presented many lectures and talks on China's grain and oil market in conferences and workshops all over the world.
In past several years, three factors were identified to have an impact on the oils and oilseeds consumption in China. These factors are population and income growth, urbanization, and changing structure of livestock industry. Along the years, with the limited arable land and competition among grains and oilseeds for planting area expansion, oilseeds have been less preferred and led to stagnating production volume. This subsequently led to increase reliance on imported oilseeds, and causes the influence of annual growth of domestically produced oilseeds on vegetable oils prices to slowly weaken. On the other hand, the influence of oilseeds production will be more reflected on the price difference between different oils, and between different regions. China’s vegetable oil production is predicted to rise slightly by 2.3% to 23.2 million MT in 2013/14, and import volume will reduce sharply by 16.7% to 8.03 million MT. In terms of demand, total demand volume for vegetable oil, including ones to be exported, is predicted to increase by 2.4% to 28.98 million MT. As meat consumption growth will remain steady until 2021, the China is forecasted to bring in more soybeans to satisfy the growing requirements for protein meal. This will result in growing domestic supply of soybean oil and reduce the need for additional vegetable oil import in coming years.
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