Imported rapeseed meal was delivered against the Zhengzhou Commodity Exchange (ZCE) rapeseed meal contract for the first time as China also continues to open agriculture futures and options contracts to international firms.
Over the past ten years, imports have shifted from imports of rapeseed to imports of rapeseed meal. In the 2013/14 marketing year, rapeseed imports hit a high of 5.0 million tons but have trended down to just 1.7 million tons in 2021/22.
During that same period, rapeseed meal imports have steadily risen from just 314k tons in 2013/14 to 2.2 million tons in 2021/22.
ZCE does have rapeseed futures, but the product is illiquid with an open interest of just 6 contracts. The rapeseed meal contract is much more liquid with an open interest of 763k contracts and daily volume usually over 500k contracts.
The delivery of imported rapeseed meal against domestic futures contracts also increases the company’s ability to hedge its risks and increases the linkage of the domestic price with international prices.
Rapeseed meal was primarily used in aquaculture and duck feed, but China’s efforts to reduce soybean meal in feed rations has also led to it being increasingly used in hog rations. While the country’s imports are increasing, rapeseed meal provides a level of diversification away from over-dependence on US and Brazilian soybeans, with rapeseed imports primarily coming from Canada as well as Australia.