Rapeseed purchase and storage policy expected to continue

The rapeseed meal market has reached a critical period, and where the market goes from here has become a matter of considerable concern among industry insiders. In the author's view, after a long period of sideways oscillation, the rapeseed meal futures and spot markets have limited room for short-term decline and are expected to oscillate upward.

Rapeseed purchase and storage policy expected to continue, with adjustments to the purchasing method

The national summer grain purchase work conference was held recently, and a clear answer on the rapeseed purchase and storage issue will be given. Judging from feedback from relevant departments, this year's rapeseed purchase and storage may adopt a method of implementation by province with subsidized lump-sum contracts, with specific purchasing rules organized and implemented by each province. As for whether the rapeseed oil produced after processing will be included in unified state treasury reserve management, that is still unknown.

The author learned from relevant departments in Hubei Province that the province is initially considering a subsidy of 0.2 yuan per jin for rapeseed purchase and storage enterprises this year. Rapeseed processing enterprises will operate independently and bear their own profits and losses for rapeseed oil and rapeseed meal products, while the specific rapeseed purchase price has not yet been set.

Although the implementation measures for rapeseed purchase and storage in each province have not yet been issued, based on what is known so far, the pressure on the domestic rapeseed meal market is relatively small.

First-quarter rapeseed arrivals down year-on-year, short-term rapeseed meal inventories low

Customs statistics show that in the first quarter of this year, China imported a total of 920,000 tons of rapeseed, a decrease of 190,000 tons from 1.11 million tons in the same period last year, a decline of 17%. Due to the drop in rapeseed imports in the first quarter, coastal oil mills in China began to experience a situation of having no rapeseed to crush starting in April, with more than half of the mills having to shut down and wait for supplies.

Although the domestic aquatic product demand season has not yet arrived at this time, because of reduced raw materials and mill shutdowns, rapeseed meal inventories have also declined noticeably, and the tight supply of rapeseed meal at some mills is still continuing. Statistics from relevant institutions can also illustrate this point. In early April, rapeseed inventories at coastal oil mills were about 500,000 tons, while on May 19, rapeseed inventories at coastal mills fell to about 400,000 tons. In addition, at the end of April, rapeseed meal inventories at coastal oil mills were 58,000 tons, and current rapeseed meal inventories are 45,000 tons.

Domestic rapeseed production fell sharply this year, with tight rapeseed meal supply expected later

Affected by last year's warm winter climate, the rapeseed maturity period in the main winter rapeseed production areas of the Yangtze River Basin was generally earlier than in previous years. At present, new rapeseed in Hubei, Hunan, Jiangxi and other areas has basically been fully harvested, and more than 70% has also been harvested in Anhui. Rapeseed has not yet been concentrated on the market, but scattered quotations have already appeared on the market, mostly concentrated at 2.0—2.3 yuan/jin.

Judging from the rapeseed harvest situation, taking Hubei as an example, the per-unit yield of most fields is 280 jin/mu, down 30—40 jin/mu from last year, and even better fields are only at 300 jin/mu, while last year's highest yield was 350 jin/mu. Drought weather encountered in the early stage of rapeseed growth and maturity, causing insufficiently plump seeds and more seedless or empty shells, is the main reason for the yield decline.

Previously, multiple institutions conducted on-the-ground surveys and reached the conclusion that China's winter rapeseed planting area had declined. Considering the drop in per-mu yield as well, winter rapeseed production this year is expected to fall 15%—20% from last year, and in some provinces it may even reach 30%. With the relatively large decline in rapeseed production this year, the domestic rapeseed meal market supply may become tight later on.