- Neutral to Bearish Black Sea Sunflower Oil: China’s rising soybean oil exports intensify competition in key Asian vegetable oil markets, weighing on Black Sea sunflower oil demand.
- Structural Shift in Trade Flows: Surplus Chinese soybean oil, driven by overbuilt crushing capacity and slowing domestic demand, is reshaping global oilseed and vegoil trade patterns.
- Support from Alternative Origins: Higher soybean oil exports from China and the U.S., along with Tunisian olive oil, are expected to offset lower Russian sunflower and Indonesian palm oil shipments in 2025/26.
China Becomes Net Soybean Oil Exporter
China is set to remain a net exporter of soybean oil for a second consecutive year, a marked reversal from its role as the world’s largest soybean oil importer as recently as 2012/13. According to USDA FAS, this shift is being driven primarily by record shipments to India, where cargoes are largely in crude form to circumvent higher tariffs on refined oil, while South Korea has absorbed notable volumes of refined soybean oil.
Massive investment in crushing capacity has turned China into the world’s largest soybean oil producer. That buildout was originally aimed at meeting booming demand for protein meal and vegetable oil during years of rapid economic growth. Today, however, domestic consumption growth is slowing amid weaker consumer demand and demographic pressures, including an aging and shrinking population. As a result, soybean oil production now exceeds internal requirements, creating persistent exportable surpluses.
Global Vegetable Oil Balance and Outlook
USDA’s 2025/26 outlook suggests that higher soybean oil exports from China and the United States, combined with greater olive oil shipments from Tunisia, should more than compensate for lower sunflower oil exports from Russia and reduced palm oil flows from Indonesia. This rebalancing underscores China’s growing influence on global vegetable oil supply and trade dynamics.
Market Impact: Pressure on Black Sea Sunflower Oil
The emergence of China as a significant soybean oil exporter is neutral to bearish for Black Sea sunflower oil, particularly in Asia. Rising Chinese availability, alongside lower projected Russian sunflower oil exports, adds competition in key import markets and may erode Black Sea market share. With China’s crushing sector continuing to outpace domestic demand growth, these shifts point to a more structural realignment in global oilseed and vegetable oil flows rather than a short-term dislocation.
Source: Market Data
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