Chinese agricultural scientists have created a trial plantation of oil-producing palm trees in the country’s southernmost island province of Hainan. The Hainan-based Chinese Academy of Tropical Agricultural Sciences said on Friday [17 November 2017] it has taken two years to grow the exotic tropical plant. So far, it is thriving on a 5-hectare trial plantation area…Full Article: Xinhua Nov 2017

Key Point

  • Since 2015, Chinese scientists have attempted to implement large-scale transplanting and cultivation of oil palm trees. The goal is to establish palm oil cultivation in the provinces of Yunnan and Guangdong.
  • During the 1980s, China attempted to introduce palm oil production but the attempt failed. In 2011, the first successful transplantation of oil palm seedlings occurred in China.

ChinaAg Comments

  • By 2020, according to the RSPO, China’s palm oil demand will reach 12 million MTs.
  • Palm oil is used in food, cosmetics and biofuels. As of 2017, China was wholly reliant on imports to meet demand. Indonesia is the largest palm oil producer (~36 million MTs in 2017), followed by Malaysia (~21 million MTs). Within Malaysia, Sabah State (northeastern Borneo Island) is the largest producing region.
  • From January to May 2017, Indonesia exported 1.3 million MTs of palm oil to China, while Malaysia exported 650,000 MTs.
  • In 2016, Indonesia exported 2.6 million MTs of palm oil to China, while Malaysia exported 1.8 million MTs. Over the past 10 years, China’s demand for palm oil has hovered around 5 million MTs to 6.6 million MTs.
  • From January to August 2016 (first 8 months), Chinese imports of Malaysian palm oil totaled RB 3.13 billion (~USD 762 million).
  • In July 2016, the CEO of McDonald’s China stated that the company plans to replace its palm oil usage with a mixture of sunflower seed and canola oil in 2017.
  • From 2011 to 2015, Chinese (incl. Hong Kong and Macau) imports of palm oil were stable, fluctuating only slightly around 5.9 million MTs. Nearly all imports was refined palm oil as opposed to crude/unrefined palm oil. Indonesia and Malaysia were the dominant suppliers, with Indonesia surpassing Malaysia as China’s top supplier in 2015. In 2015, China imported 3.4 million MTs of palm oil from Indonesia and 2.4 million MTs from Malaysia.
  • In October 2014, Malaysia reported a drop in palm oil production.
  • Founded in 2004 and headquartered in Kuala Lumpur, Malaysia, Roundtable Sustainable Palm Oil (RSPO) is a palm oil trade association that issues certificates to suppliers who follow a sustainable (environmentally friendly) approach to production. In 2013, the RSPO held its first certification seminar in China.
  • Founded in 1993 and headquartered in Tianjin, Tianjin Julong Group is a major Chinese palm oil producer and distributor. In 2006, Tianjin Julong Group began operating a palm oil plantation in Kalimantan, Indonesia. The bulk of the companies processing and distribution occurs in the Tianjin Port Free Trade Zone.

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