China floods India with cheap soyoil amid weak domestic demand
What's the story
China's soybean oil exports to India have skyrocketed, as weak domestic demand coincides with strong imports from South America and the US. In October alone, China exported a record 70,877 tons of cooking oil, most of it going to India. The first 10 months of this year saw exports reach 329,000 tons—almost triple what they were for the whole of 2024.
Trade concerns
China's reliance on foreign soybeans seen as vulnerability
China has long considered its dependence on foreign soybeans, which are processed into animal feed and cooking oil, a potential weakness. This is especially true in a world where geopolitics and epidemics can easily disrupt commodity flows. However, strong imports from South America are impacting a relatively lackluster local economy, prompting Chinese soyoil processors to look for alternative markets.
Market shift
China's soybean oil trade route to India
The new trade route between China and India is expected to get busier, especially after last month's trade truce and improving relations between Beijing and New Delhi. Aashish Acharya, VP at Patanjali Foods Ltd., one of India's largest vegetable-oil buyers, said the move makes logistical sense for India. He explained that "quality is comparable with South American supplies," prices are competitive, and Chinese exporters are looking for dependable buyers.
Import increase
China's soybean oil imports to India expected to rise
Acharya also said that imports from China are around 70,000 tons so far in November and could go up by another 12,000 tons by month-end. He expects them to reach around 350,000 tons in the six months through April. This would make China India's third-largest supplier during this period.
Production trends
China's soybean oil production and consumption patterns
China is the world's largest producer of soybean oil, producing around 20 million tons annually. Until recently, the country consumed almost all of its production domestically and had to import to meet local demand. However, with a slowing economy and reduced dining out habits, soybean oil consumption from restaurants has declined.