Russia Loses Chinese Corn Market
Reading time: 2 minutes
As of December 30, 2022, the price of domestic first-grade Corn Oil has dropped by 10.7% in China, from the beginning of the second half of the year. In the third quarter of 2022, the price of China’s Corn Oil began to fall and then showed a trend of stable operation. The average market price of primary Corn Oil in the third quarter of 2022 was 12,740 yuan/ton, which was 1,160 yuan/ton or 8.3% lower than the average market price of 13,900 yuan/ton in the second quarter; the average market price of crude Corn Oil reached 11,550 yuan/ton, compared with the average market price of 12,710 yuan/ton in the second quarter, it fell 1,160 yuan/ton, or 9.1%.
The strong rebound of Corn Oil prices after the oversold in the third quarter was affected by multiple factors. First, since the Federal Reserve raised interest rates, commodities fell, and Oils and fats opened a rapid decline channel, which formed a strong negative for Corn Oil. In addition, the price was high then, and the market was avoiding risks. There are no transactions. The drag of demand, the suppression of the market, and the rapid decline of Corn Oil under the double attack; secondly, the peak period of maintenance of deep processing enterprises in July and August every year, the output of Corn germ decreases, and the market supply is tight. Under the situation of short supply, the price began to rebound continuously, supporting the price of Corn Oil; finally, large Oil factories began to purchase and sell Corn Oil, which increased the activity of market demand, and the increase in orders in the hands of Corn Oil companies gave them the confidence to stand up and raise prices.
In the fourth quarter, the domestic Corn Oil market continued to run steadily after a slight rise and started a downward trend at the end of the quarter. As of December 30, 2022, the average price of first-grade Corn Oil in the fourth quarter was 14,340 yuan/ton, which was an increase of 1,600 yuan/ton, or 12.5%, from the average market price of 12,740 yuan/ton in the third quarter. The average market price of crude Corn Oil is 12,990 yuan/ton, an increase of 14,400 yuan/ton, or 12.5%, compared with the average market price of 11,550 yuan/ton in the third quarter. According to AgFlow data, China imported 1.4 million tons of Corn from Ukraine in March, followed by the US (0.5 million tons), Bulgaria (48,101 tons), and Brazil (18,766 tons). Russia is losing China market with only shipment of 5,860 tons.
The operating rate of deep processing recovered in the fourth quarter, but the overall output was still low. The profits of crude Corn Oil and first-grade Oil were both upsides down. Oil factories and traders raised their prices to ensure profits. Afterward, the market stabilized, and the price of Corn Oil continued to be at a high level. The downstream purchases were cautious, and some sunflower Oil was purchased. The market demand for Corn Oil weakened, suppressing the market for Corn Oil. In late December, the germ price began to decline, showing an apparent downward trend. The cost-side support of Corn Oil weakened, and the price started to fall, with the most significant drop of 13.8% within the month.
China Corn Oil Market Outlook Forecast
To sum up, at present, the stocking for the Spring Festival is over, the overall market trading is light, and the pre-orders are executed. It is difficult for the price of Corn Oil to fluctuate significantly before the year; the price of germ is currently rising, showing a trend of being stable and relatively strong. It is expected to continue to be at a high level later, supporting the price of Corn Oil. Generally speaking, the price of Corn Oil will continue to rise slightly in early 2023, showing a stable and relatively strong trend.
Other sources: OILCN
Try AgFlow Free
Access Free On Updates for Corn, Wheat, Soybean,
Barley, and Sunflower Oil.
No Credit Card Required & Unlimited Access In Time
