MPOB Palmnews
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 Mahamad Rodzi Abdul Ghani
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SHANGHAI, Nov 1 (Reuters) - Producers like Malaysia and Indonesia canhope to sell more palm oil to China despite rising overseas prices becauseimported palm oil is still cheaper than domestic oils, traders said onThursday.China would use up all palm oil quotas in 2001, wiping the slate cleanas it braces to import a huge amount of palm oil next year as requiredunder the terms for joining the World Trade Organisation, they said.China would thus import 300,000 to 400,000 tonnes for the months ofOctober to December, exhausting quotas left over from this year'sallocation of 1.4 million tonnes, analysts said."China will have to finish all the quotas for this year because it willhave to import much more after China joins the WTO, which is happeningsoon," said Liu Aimin, edible oil analyst at Beijing Orient AgribusinessConsultant.China expects to join the world trade body later this year, after whichit is expected to import 2.4 million tonnes of palm oil in 2002 at lowtariffs under a tariff-rate-quota system.By 2006, the tariffs will be dropped and all imports will be subject toa flat duty of nine percent.Traders said they expected the market to use up all the remaining quotasfor 2001 due to steady domestic demand, although overseas prices arefirming.

MALAYSIAN PRICES RALLYOn Thursday, Malaysian palm oil futures rallied for a fifth consecutiveday on news that major buyer India had cut import duty for crude palm oil(CPO).By 0645 GMT, the benchmark January futures contract traded at 1,013ringgit ($266.58) a tonne, up 23 ringgit from Wednesday's close.India cut the import duty on CPO to 65 percent from 75 percent onWednesday, a move Indian traders said would depress domestic prices anddiscourage farmers from growing oilseeds."We will be able to import palm oil even if prices hold at these levelsafter factoring freight charges and tariffs, because it is still cheaperthan domestic soyoil and rapeseed oil," said a trader with a domestic firmin Beijing.Wholesale prices of China's edible oils have been easing, with soyoilfrom central Henan province quoted at 4,600 yuan a tonne, down 4.2 percentyear-on-year, and rapeoil from the eastern city of Hangzhou at 4,700 yuan,down 2.9 percent.But these oils are still costlier than imported palm oil, despite thejump in Malaysian prices, a good gauge for Asian exporters.

DEMAND STEADYEven as winter nears, China's import demand will remain steady for therest of the year.China's food industry usually uses less palm oil during winter becauseit solidifies more easily than alternatives."There is still demand for palm oil, even though consumption normallytapers off during winter because people prefer to use other oils such assalad oil," said Tian Yu, an analyst at Shanghai Pansun InformationTechnology Company.China imported 1.12 million tonnes of palm oil from January toSeptember, but some of that was imported in the beginning of the yearusing last year's quotas, traders and analysts said.They said they expected China to import about 1.5 million tonnes ofpalm oil this year.In the first nine months, China imported 833,254 tonnes of palm oilfrom Malaysia, up 74.4 percent year-on-year, and 277,551 tonnes fromIndonesia, up 24.8 percent year-on-year, custom figures show.Malaysia and Indonesia are the world's top two palm oil producers.On Wednesday, Societe Generale de Surveillance (SGS) said Malaysia'spalm oil exports in October were estimated to have risen to 927,503 tonnesfrom 700,995 tonnes in September, with the biggest buyer China taking174,008 tonnes.