Rapeseed oil is used as a cooking oil and is highly popular for its use in culinary applications and health benefits. The properties of rapeseed oil are sometimes misunderstood for canola oil though they contain different genetic makeup and erucic acid content.
Currently, China currently accounts for 14,700,000 metric tons of rapeseed production which is 3rd largest in the world, behind Canada and the European Union.
With the launch of rapeseed oil futures as a QFI-approved product by ZCE, China’s market is set to widen its influence of commodities into the international markets. On 2nd December, ZCE also released a notice to solicit public opinions to open up new internationalized products.
On January 2023, Zhengzhou Commodity Exchange announced that Rapeseed Oil, Rapeseed Meal, and Peanut Kernel Futures and Options of Zhengzhou Commodity Exchange (ZCE) have been added to the list of specified domestic products and will be open to overseas traders as of January 12, 2023.
Apart from rapeseed oil futures, other forms of the product include rapeseed futures 及 rapeseed meal futures which are currently not included in the product list from ZCE for QFI trading.
Hence, this article will elaborate on the market for rapeseed oil and the contract specifications.
About Rapeseed Oil
Rapeseed Oil Futures from ZCE are graded based on the GB 1536-2004 Chinese standard issued by the general administration of quality supervision, inspection, and quarantine of the People’s Republic of China.
The benchmark for delivery is grade 4 rapeseed oil which conforms to these specifications.
Based on Reuters, in July, the spread between the rapeseed oil on the Zhengzhou Commodity Exchange and soy oil on the Dalian Commodity Exchange widened to as much as 2,500 yuan ($357.50) per tonne.
Demand
Based on the market research from Fortune Business Insights, while China is the 3rd largest in the world for the production of rapeseed oil, China is one of the largest consumers of rapeseed oil in the world, which utilizes rapeseed oil in cosmetic formulation, food processing, and in several other commercial applications… coupled with increasing demand for rapeseed oil by households are some the significant reasons that are expected to contribute to the growth of the Asia Pacific rapeseed oil market during the forecast years (2019-2026).
Supply
Globally, In 2021/2022, rapeseed prices were supported by tight global supply, in part driven by Canadian canola (rapeseed) crop.
Some of the supply factors that will impact rapeseed oil globally include the EU-27 production and imports, Canadian production, Ukraine production and exports, and Australian production and exports. The increase in production from the countries mentioned are macro factors may impact rapeseed supplies, leading to price changes.
Rapeseed Oil Futures Contract
The Rapeseed Oil Futures Contract has the following specifications:
The contract size for Rapeseed Oil Futures Contract has a minimum price fluctuation of CNY1/metric ton with a minimum trading margin of 5% of the contract value. As a physical delivery good, the last delivery day is on the 13th trading day of the delivery month.
Contract months are January, March, May, July, September, and November.
Trading Hours are from Monday to Friday, at these trading hours:
9:00 am – 11:30 am / 1:30 pm – 3:00 pm (Beijing time)
Rapeseed Oil Futures symbol: OI
Alternatively, for clients that want to trade in ICE Futures U.S. Canola futures, the contract specifications are as follows:
The contract size for Rapeseed Oil Futures Contract has a minimum price fluctuation of $0.10/tonne ($2.00/contract) with a contract size of 20 tonnes per contract.
Trading hours are Monday to Friday
8:00 PM – 2:20 PM/ 20:00 – 14:20 (New York)
1:00 AM – 7:20 PM/ 01:00 – 19:20 (London)
9:00 AM – 3:20 AM/ 09:00 – 03:20 (Singapore)
Canola Oil Futures symbol: RS
Benefits of Trading With Zhengzhou Commodity Exchange Through Orient Futures Singapore
Orient Futures Singapore is an overseas intermediary of the Zhengzhou Commodity Exchange (ZCE), Dalian Commodity Exchange (DCE), and Shanghai International Energy Exchange (INE). This entails direct access to trading, clearing, and settlement from Chinese Exchanges.
Apart from direct access, Orient Futures Singapore is also able to offer customized market research and bespoke services for clients such as financial institutions, hedge funds, proprietary trading firms, and professional traders.
Through our specialized services, both direct access to Chinese exchanges and trading infrastructure are well secured, shortening lag times, increasing efficiency and effectiveness.
Market News
According to Trading Economics, Rapeseed Oil decreased 105.25 EUR/T or 13.96% since the beginning of 2022, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity.
Elsewhere in Ceicdata, the 1st month’s data is updated monthly, averaging 7,769.999 RMB/Ton from Jun 2007 to Oct 2022.
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