Wednesday, March 26, 2014

Veg Oil Prices Falling in China

China's liberal policy for soybean imports is conveying benefits to Chinese consumers. Falling global prices for soybeans are causing China's cooking oil prices to drop.

Yihai Kerry--a Singapore-owned company that is the leader in China's cooking oil industry--announced that it plans to cut prices on its Arawana-brand vegetable oil products by 10%. This follows similar price cuts over the course of last year that will bring vegetable oil prices down more than 20% from early 2013. A company spokesman attributed the price cut to a decline in the cost of raw materials that is due to falling global prices for soybeans since last year.

Competition ensures that low prices are transmitted to consumers. The second-biggest veg oil-supplier, COFCO, said it also plans to cut the price of its Fulinmen oils about 10%.

Yihai Kerry has sent out a letter to sales agents notifying them of the price cut. It will take four to six weeks for the price cuts to reach retail products.

A reporter checked price quotations from a wholesale market in Beijing and found that a case of four 5-liter bottles of Arawana soybean oil cost 204 yuan in January 2013. The price was down to 173 yuan in December 2013, a decrease of 15%.

In general, Chinese food prices seem to be in deflationary mode. According to National Bureau of Statistics retail food price data for mid-March, sixteen commodities fell in price and eight increased. Several were unchanged. Pork prices fell 2.4% during the first half of March 2014.

In contrast, Chinese officials are preventing corn prices from falling by buying up 60 million metric tons (more than a fourth of the harvest) to support prices, subsidizing marketing of corn, and rejecting imports.

1 comment:

Aashessh Gupta said...

nice blog !! i was looking for blogs related of animal feed companies . then i found this blog, this is really nice and interested to read. thanks to author for sharing this type of information.