Member Article

China and the edible oil market

With a population of 1.34 billion, 50% of which live in urban areas; and a growing affluent middle class, China’s edible oil consumption is over 30 million tonnes. This is equal to 22 kgs per capita – of which close to 8 million tonnes is imported. The main varieties of oils consumed amongst the Chinese are produced from soybeans, rapeseed, palm and peanuts.

Amongst the specialty edible oils, sesame seed oil is the most traditional and has been consumed in China for many centuries, reportedly as long as 3,000 years, and was used as food and medicine, and in producing ink for calligraphy. Until 2004/2005 China was self-sufficient with a sesame seed annual crop exceeding 700,000 tonnes and exporting close to 100,000 tonnes of high quality seeds each year to Japan and South Korea.

However, a disastrous crop yield, followed by a shift from sesame seed to less fragile and labour intensive crops such as soybeans, corn, etc. caused China’s production to spiral into a decline.

In the following years, China’s output has continued to fall to only 200,000 tonnes in 2013 and China has become the world number one importer of sesame seed, thus creating a huge world imbalance between supply and demand. Indeed, a similar trend is taking shape in India where the production is regressing while the consumption is surging thanks to a growing middle class.

Although the sesame seed price is moving up with every crop and sesame seed oil is probably the most expensive edible oil, it is interesting to note that sesame seed came third on a list of the top ten new oil products launched in China in 2011 with vegetable oil taking the lead and rapeseed oil a close second.

With Chinese and Indian sesame seed production reducing, the major growing countries have trouble filling the gap as world consumption of sesame seed oil and related products is increasing faster than production. The biggest producers are Ethiopia, India, Sudan, Nigeria, Tanzania, Burkina Faso, Mali, Mozambique, Uganda and Chad. As one of the world’s biggest supplier of sesame seeds, Maviga is active in each of these countries and we are working closely with these producers to try to fill the void and ensure that Chinese and Indian markets are able to access this oil.

This was posted in Bdaily's Members' News section by Maviga .