Chinese Rice Bran Oil to Be Exported to the United States and Canada

On December 10, Yihai Kerry Group officially announced a partnership with North American distributors to export rice bran oil to the U.S. and Canadian markets. As the world’s largest producer of paddy rice, China generates over ten million metric tons of rice bran and rice husks each year, which are either used as animal feed or discarded as waste. With rice bran oil processing technology now well established, Yihai Kerry aims to create a new growth driver in the edible-oil market, which is often characterized by intense price competition.

Japanese companies have extensive experience in extracting rice oil from rice bran. According to a Japanese distributor partnering with Wilmar International, the Japanese rice-oil market is growing rapidly, with annual sales reaching between JPY 8 billion and JPY 9 billion. Mu Yan-kui, President of Wilmar Golden Dragon Fish Co., Ltd., stated that China is the world’s largest producer of paddy rice, creating substantial market potential for rice-oil production.

Yihai Kerry entered the Japanese market in 2018 and quickly established a strong foothold, forcing Japanese rice oil producers to cut prices in order to maintain their market share.

In the domestic market, Yihai Kerry has established a comprehensive presence across the entire upstream and downstream value chain of rice oil. In major rice-producing regions such as Northeast China, Jiangsu, Jiangxi, and Guangxi, Yihai Kerry has built numerous rice-processing facilities with a combined capacity of approximately 5 million tonnes, ensuring a steady supply of rice bran raw material and enabling prompt processing to prevent rancidity.

Yihai Kerry’s R&D center in Shanghai has been engaged in the research and development of rice oil processing technologies for nearly a decade. The company states that its process technology has reached an internationally advanced level, enabling it to obtain market access approvals in developed markets such as Japan and the United States.

Chen Bo, General Manager of Yihai Kerry Foods Marketing Co., Ltd., stated that China imports substantial quantities of edible oil from international markets each year; now, rice bran oil is being exported to developed countries such as the United States and Japan, thereby filling a previously unmet market gap.

Domestic rice oil production capacity is approximately 300,000 tonnes, with Yihai Kerry holding the dominant market share. The majority of players in the market are small enterprises, constrained by limited processing scale for paddy rice and a restricted supply of rice bran as raw material.

The Chinese edible-oil market is highly competitive, with a high degree of product homogeneity and average industry profit margins that typically hover around 5%, amid frequent price wars. In specific segments, Luhua holds a strong position in the peanut-oil market, while Xi Wang wields significant influence in the corn-oil market.

Yihai Kerry holds a leading market share in brands such as Jinlongyu and has recently stepped up its expansion in niche segments like sunflower oil, with rice bran oil being positioned by the company as a blue-ocean market.