China edible oil imports hit seven-year low as Covid lingers

China’s imports of edible oils plunged to the smallest in more than seven years on weak demand from the restaurant industry as the impact of Covid lockdowns lingers, and on expectations prices will drop even more.

Just 254,000 tons were unloaded in June, the lowest monthly total since February 2015, according to customs data compiled by Bloomberg. Inbound cargoes fell over 20% from the previous month and 75% from a year earlier.

Global buyers of palm oil, the most consumed vegetable oil, have been riding a roller-coaster this year, with prices climbing to a record close in April before slumping 45% as Indonesia ramps up exports. Analysts expect India and China to return to the market to take advantage of lower prices, but trade data show there’s still a long way to go. 

Although vegetable oil prices have dropped significantly, they are still quite high from a historical perspective and catering consumption in China has yet to recover, said Rosa Wang, an agriculture analyst at Shanghai JC Intelligence Co.

New orders usually take a while to be reflected in trade data, so China’s imports of cooking oils will probably pick up this month, but not significantly, said Lin Guofa, head of research of consultancy Bric Agriculture Group. If importers expect prices to drop further, they will wait, Lin said.

Benchmark palm oil prices plunged as much as 7.3% on Wednesday in Kuala Lumpur, near to the lowest intraday level in a year.