Rapeseed Oil Prices Spike, Then Plunge in Volatile July
China's rapeseed oil prices experienced a volatile July, initially rising before pulling back. According to SunSirs spot market data, the average price of rapeseed oil increased by 3.16% in just over three weeks, from 9,922 RMB/tonne on July 1 to 10,236 RMB/tonne on July 27.
The upward trend was driven by a slowdown in rapeseed arrivals and tight raw material inventories at crushing plants, which led to reduced spot market circulation. However, as prices climbed, the market began to anticipate a surge in rapeseed arrivals, raising concerns about ample future supplies.
July typically falls within the off-season for edible oil consumption, with end-users purchasing on an as-needed basis rather than stockpiling on a large scale. The price spread between rapeseed oil and soybean oil also highlighted the latter's substitution advantage, making it difficult for rapeseed oil demand to maintain momentum.
The sharp pullback in prices was attributed to the cooling of speculative sentiment in the edible oil sector, as well as the weakening of cost support from international markets. With the factors driving the price increase largely dissipated, SunSirs expects rapeseed oil prices to remain weak and volatile in the short term.