Ganyuan Food, a snack company, recently released its first half financial report which provides insight into how companies are responding to higher edible oil prices.
In its financial report, the company noted that its price for palm oil in 2022 has risen by 48.8%. In response to this price increase, the company increased its use of rice oil as an alternative.
The company noted that rice oil prices were slightly lower and are also more stable than imported palm oil. However, now that palm oil prices have fallen, the company will increase its use of the product.
In response to an investor question last week, the company also said that it did not currently hedge its palm oil demand. The company said it spent more than 10 million yuan ($1.5 million USD) on palm oil procurement in the first half of 2022.
Many food companies in China, including publicly traded ones, still primarily rely on cash markets and alternative products when sourcing their supply, despite that futures and options markets are available for key inputs.