A Hundred Million Mu of Rapeseed Flowers Bloom Across China: Where Does the Rapeseed Oil Go?

In early spring in March, the rapeseed flowers are blooming again, and the areas around cities and the ridges of the fields all turn golden yellow.

Once the flowers finish blooming, freshly pressed rapeseed oil is about to hit the market. But this “dark” oil, which carries the taste memories of the previous generation, is now nowhere to be found in today's shops and supermarkets. If people want to eat rapeseed oil, they can only go to the countryside themselves and buy it from small village workshops.

China is a major rapeseed-growing country. According to statistics from the United States Department of Agriculture (USDA), the world's total rapeseed harvest area in 2014 was 541.98 million mu, with China accounting for more than one-fifth, an estimated 112.5 million mu. However, although rapeseed-growing areas are spread across the north and south of China, China is still the largest importer of rapeseed, with imports of 3.75 million tons in 2014, accounting for 28.4% of the world market.

After the flowers fade, where does the oil pressed from rapeseed go?

Rapeseed oil in supermarkets and stores is less than 10%

“There is very little rapeseed oil in supermarkets now, and the taste and color are different from before. If you want to buy the authentic rapeseed oil from memory, you can only go to small workshops in Jiangxia and Huangpi.” a Wuhan resident told reporters.

In recent years, various edible oil varieties such as salad oil and blended oil have captured the vast majority of the edible oil market. Reporters visited the edible oil sections of many supermarkets in Wuhan and found that the edible oil shelves were mainly stocked with soybean oil, blended oil, corn oil, and so on, while some supermarkets also placed relatively expensive oils such as tea seed oil and olive oil in prominent positions. Traditional edible oil like rapeseed oil, however, was placed in corners, along the edges, or on lower shelves, and in very small quantities, making up less than 10% of the edible oil section in supermarkets. Some small supermarkets simply did not carry rapeseed oil at all.

“Consumers' living habits have changed now. Most people choose relatively affordable soybean oil or corn oil, and many blended oils also contain rapeseed oil, which suits today's mainstream concept of balanced health care. So not many people come to supermarkets specifically asking for rapeseed oil. Therefore, the types and quantities stocked are also somewhat less than before.” Ms. Zhang, an edible oil marketing specialist at a Zhongbai supermarket in Wuchang District, Wuhan, told the Changjiang Business Daily reporter.

In addition, an industry insider also tipped off reporters that some high-end tea seed oil and olive oil currently sold on the Chinese market are actually blended from rapeseed oil. “Because compared with other vegetable oils, China's rapeseed oil as a whole has relatively high nutritional value, decent taste, and a relatively reasonable production price. As a result, some high-end manufacturers buy rapeseed oil in large quantities to blend into high-end edible oils with low output and high prices. Therefore, even less rapeseed oil flows to the market.”

If it is colorless and odorless, is it still rapeseed oil?

“In the past, when the oil was heated in a wok it would bubble, and whether you smelled it or tasted it, it had its own distinctive flavor. But the rapeseed oil sold on the market now does not bubble when heated in a wok, and the flavor is gone too.” Shayang County in Jingmen City, Hubei Province, is known as “China's Hometown of Rapeseed Oil.” Sister Li, a villager in Shayang County who has insisted on eating rapeseed oil for years, has witnessed the changes in rapeseed oil on the market.

Compared with the dark rapeseed oil with its special aroma in the past, why has rapeseed oil on the market now changed so much?

“It is not that there is a problem with the quality of rapeseed oil, but rather the result of rapeseed oil processing technology gradually maturing.” Mr. Hong, who has been engaged in oil and fat biotechnology research and development in Wuhan for many years, told reporters that rapeseed oil on the market currently has different grades. “First-grade rapeseed oil is refined through modern processes and meets modern edible oil requirements, being colorless and odorless. Fourth-grade rapeseed oil, on the other hand, retains the original oil refining process and maintains the traditional flavor.”

Taking Shayang County as an example, “in the 1970s and 1980s, rapeseed processing equipment and technology were quite backward, and there was no refining process, so it looked dark.” said Gong Zhenglin, general manager of Hubei Hongsen Tianli Oil & Fat Biotechnology Co., Ltd. Starting in the 1980s, the state began to pay attention to oil safety and researched hybrid rapeseed, gradually reducing the content of “glucosinolates and erucic acid” in rapeseed, creating today's “low-glucosinolate, low-erucic acid” rapeseed, which is what we now call double-low rapeseed. Its large-scale cultivation and production changed the original appearance and characteristics of China's traditional rapeseed oil.

Is the nutritional value and purity of colorless and odorless rapeseed oil inferior to that of the past? Mr. Hong gave a negative answer. “Although hybrid rapeseed has changed the product's appearance through deep processing, the nutritional value of rapeseed oil has still been retained, basically the same as in the past, and it can be used with confidence.”

Where did the rapeseed oil go?

In 2014, China's rapeseed harvest area was estimated at 112.5 million mu (USDA statistics), an increase of 0.67% over 2013; the national total rapeseed output reached 14.7 million tons, an increase of 3.5% over 2013. In addition, according to a survey by Hubei Province's agricultural department, Hubei Province's rapeseed summer harvest area in 2014 was estimated at 18.7305 million mu, an increase of 336,000 mu over the previous year; total output was 2.582 million tons, an increase of 74,000 tons; total output ranked first in the country for 19 consecutive years.

So where did all this rapeseed oil go?

“Farmers keeping it for themselves, small workshops selling directly to consumers, or signing contracts with enterprises for sales all mean that even less of China's already insufficient rapeseed oil is available on the market.” Mr. Hong said. “At present, China's rapeseed oil market is mainly divided into small-packaged products and large-packaged products. Small-packaged products are directly purchased by enterprises and correspond to supermarkets and stores; the other type, bulk packaged oil, is mainly bought in large quantities by ton by some enterprises that use it.”

Sauce companies such as Laoganma, as well as seasoning companies producing hot pot base and sauces, often need rapeseed oil for flavoring in their products, so they choose to cooperate with growers and processing enterprises, signing contracts for nearly a thousand tons of rapeseed oil demand each year. As a result, the supply of rapeseed oil on China's market is limited, and consumers see even fewer varieties.

Most rapeseed oil is purchased and stored by the state

In addition to contract sales with enterprises and a small amount of retail sales, most rapeseed oil is purchased for temporary state reserves. Gong Zhenglin told reporters: “Starting from protecting farmers' interests, the state implements protective-price purchasing for rapeseed (oil), entrusts the China Grain Reserves Corporation to allocate temporary reserve plans to qualified oil processing enterprises, and entrusts oil enterprises to purchase, produce, process, and reserve. To be realistic, every year most of the rapeseed oil we produce, apart from a very small portion kept by farmers for themselves, is purchased and stored by the state, with a small amount independently purchased, processed, and sold by enterprises.”

The China Grain Reserves Corporation is the main body implementing the state's temporary purchase and storage. In 2014, the state determined that 73 entrusted purchasing enterprises and 72 entrusted processing enterprises in Hubei would participate in temporary rapeseed purchase and storage. Where does the rapeseed oil go after being purchased and stored?

“In the end it is still released to the market in turn to stabilize rapeseed oil prices.” Mr. Hong said that in recent years, the state's temporarily stored rapeseed oil has basically not left the warehouses. The state's purchase and storage of rapeseed oil is mainly to play a leverage role in price regulation, so that when international rapeseed oil prices fluctuate, the market can be stabilized in a timely manner.

The “awkward period” of rapeseed oil

However, even with state temporary storage, the amount purchased and stored is not considered large. Especially last year, various grain enterprises in 12 major rapeseed-producing areas including Hubei and Sichuan purchased a cumulative total of 3.49 million tons of summer rapeseed, down 43.34% year on year. Among them, the purchase volume of rapeseed for temporary storage was 2.15 million tons, down 52.33% year on year.

The most direct reason for the decline in purchase and storage volume is the reduction in rapeseed planting area, leading to a decrease in total output. Gong Zhenglin analyzed that rapeseed cultivation in China is still scattered and household-based, without intensive and large-scale cultivation, and the level of mechanization is relatively low.

In addition, the decline in purchase and storage volume is also related to farmers' reduced enthusiasm for planting rapeseed. Xu Hua, administrative manager of Wuhan Zhongyou Hongda Technology Industry Co., Ltd., introduced that “judging purely by economic returns, planting rapeseed is far less worthwhile than wheat.”

According to the introduction, October each year is the rapeseed planting season, almost at the same time as wheat, so the two crops are competitive. Xu Hua introduced that the net income per mu of wheat is 400-500 yuan, while the net income per mu of rapeseed is only about 200-300 yuan. “When farmers plant rapeseed, apart from what they eat themselves, the remaining part does not sell for much money either.”

“China's rapeseed oil is still in an ‘awkward period’ now, and most existing large oil enterprises are in a loss-making state on rapeseed oil projects.” Mr. Hong said. “Compared with tea seed oil and soybean oil, if rapeseed oil wants to develop toward the high-end market, its oil yield is many times higher than that of tea seed oil, and its market supply is large, so the price cannot go up; if it is treated as a mass-market oil, it cannot beat soybean and others in oil yield, and its price is not lower than its competitors, so it is very difficult to open up the market.”