Soybean imports expected to reach a record 96 million tons in 2020

In September, the oil market continued swinging higher. Of this, the price of rapeseed oil (crushed from imported rapeseed) has exceeded 9,500 yuan per ton, which is the highest level in recent years. The main supporting factors include the geopolitics impact on the oil trade, the impact from crop and inventory declines in major producing countries, marketing hype, and capital operations.
 
However, the prices of various oil may have different trends due to inconsistent supply and demand situations in the future. In all, based on prediction, vegetable oil prices will continue to maintain a high level, and soybean oil and palm oil prices may fluctuate lower, but the decline is limited:
 
1) In the context of reduced  rapeseed imports and insufficient domestic production, coupled with the news that major producing areas will continue to purchase and store rapeseed, the supply of rapeseed oil will become tighter in the later stage, driving higher prices in the vegetable oil market;
2) The demand for soybean oil would gradually enter the peak season in the coming periods, and as the vegetable oil prices rise, soybean oil substitute consumption will also see an upward trend. However, soybean imports will exceed 96 million tons in expectation this year, and soybean stocks at ports will remain high. As a result, soybean oil supplies could become relatively abundant, pressing harder on prices.
3) For four consecutive months, palm oil at domestic ports continued to decline with stocks of less than 40 thousand tons. Even worse, the subsequent adverse weather may continue to affect the production of major producing countries. Therefore, it will take a longer time for palm oil supply and inventory to recover from the shortage. However, the fourth quarter is an off-season for palm oil consumption, and the demand will also drop significantly. At the same time, the overall supply of vegetable oil will be sufficient, which will restrain the palm oil price from going up.