Chinese retail prices for peanut oil are up about 10 percent from last year. One industry analyst cited increased consumption of peanuts as snack food for the higher prices. This leaves fewer peanuts available for cooking oil. Normally, about 60 percent of peanuts produced in China are crushed to make cooking oil and 40 percent are consumed directly as food. However, now the ratio is about 50:50. Another reason cited is rising production costs for peanuts.
Peanut oil is an expensive oil in the Chinese market and its share of the market is small. One lady interviewed at a supermarket said she would substitute other oils for peanut oil. Another said she would cut back on her purchases of cooking oil, a decision she described as good for her health.
Meanwhile, rising prices of imported soybeans have been pushing soy oil prices higher since June.
In early April, the National Development and Reform Commission asked vegetable oil processors to keep their prices steady. However, the government is not expected to intervene since inflationary pressure in China has weakened.
The Chinese government did order an auction of 690,000 metric tons of soybeans it has had in storage since 2008 when they were bought to support prices. Nearly all of the soybeans were sold despite a record 6.9 million metric tons of soybean inventories in ports and 5.34 mmt of imports expected to arrive in July.