Monday, May 25, 2009

Rapeseed: the forgotten oil

China's booming agricultural imports are dominated by soybeans and vegetable oils. Not all of this vegetable oil import is new demand; some of it is displacing rapeseed oil, the traditional oil consumed in central China. Corn oil, a byproduct of corn processing, is also prominent on China's supermarket shelves now.

Rapeseed oil used to be the main oil consumed in Wuhan, capital of Hubei province. Yet an online article bemoans the fact that rapeseed oil now has virtually zero market share in Wuhan. Ten years ago, Wuhan people mainly consumed rapeseed oil, but it was unrefined, murky, and considered to be unhealthy. Now mixed oils, salad oil, soybean, palm, and corn oils dominate the market. Rapeseed oil is now mainly consumed in the countryside. It is said to be seldom used now in hot pot in Hubei and neighboring provinces and oil factories only include small amounts in mixed oils.

The weak demand for rapeseed oil translates to weak demand for rapeseed and a lot of excess capacity among rapeseed crushers in the province. This year, the government is supporting the price of rapeseed through purchases for reserves.

The article seems to be propaganda announcing an effort to regain market share for rapeseed oil in Hubei's supermarkets. It points out that palm oil can contain 51% polyunsaturated fat while “double low” (low erucic acid and low glucosinolate) rapeseed oil can reduce cholesterol and risk of heart disease. It claims that rapeseed oil's nutritional content is equivalent to that of olive oil, the "king of vegetable oils." Four "quality" rapeseed oil companies are in negotiations with Wuhan supermarkets. The province’s agriculture department is planning to allocate subsidies of 2 million yuan to support Hubei quality rapeseed oil as they try to break into the city’s supermarkets.

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