(Paula Gasol)
China’s biggest oil problem may not be paying for Nexen at $15.1 billion. Neither is it about extracting oil shale from their huge deposits at the least ecologically disturbing process. Neither is it getting the best deals out of Iran’s sanctioned oil products.
In fact, China’s oil problems are nowhere close to anything that resembles petrol. China’s biggest oil problem is keeping stable prices for soybean oil.
See, the biggest drought in the United States has caused grain products to soar in prices. And soybean was not spared.
And China, being the world’s biggest consumer of edible oil and the US’ number one market for soybean oil, this is a HUGE problem.
See, countless Chinese homemakers have found an irrepressible liking to using soybean oil to their food. In fact, China loves everything cooked with oil. So the drought in the US and its effects on soybean oil prices will definitely be felt to almost every Chinese home.
The Chinese government has been trying its best, hardest to secure edible oil prices so as to limit the debilitating effect of an (edible) oil price hike. They have recently ordered their edible oil companies to double their production. They have also been actively looking for alternative sources throughout the world.
As of yet, the prices are in check and acceptable. The rise from the beginning of the year was still very much within the acceptable range, which is good news AT THE MOMENT. When the low grains harvest in the US will then finally hit the world market, the costs are expected to rise beyond average households’ grasp.
Well, China may have been successful at their other oil exploits. They may soon be conquering all the continents’ markets for oil. Ironically, the most basic of oil products – part of what the world calls basic human need, food – is seemingly out of its grasp. Oh how wonderful it would be if the South or East China Sea areas were soybean –rich!
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