KUALA LUMPUR (August 12 2003) : China has used up most of this year's palmoil import quotas as importers take advantage of cheaper RBD olein pricesfor forward shipments and good demand during the summer months, traderssaid on Monday.
Olein, which is used as cooking oil, was quoted at $427.50 a tonne FOBMalaysia for spot August compared with $412.50 for September and $380.00for October.
"People believe there are about 300,000 tonnes left from the quotas.
But China's demand will weaken when summer is over," said one Kuala Lumpurfreight broker.
China, one of the world's main edible oil buyers, raised palm oil importquotas to 2.5 million tonnes this year from 2.4 million tonnes in 2002.
It normally buys around 250,000 tonnes of olein a month from mainproducers Malaysia and Indonesia.
"We imported 400,000 tonnes of palm oil in July. I am not sure aboutAugust but a lot of people have placed orders for September and Octobershipments because of cheaper prices," said one dealer in China.
"The quota is almost used up. It's now hard to get new licences," headded. Freight brokers said China had so far booked 350,000 tonnes of oilfor August shipment and that level should be maintained in September whenlocals celebrate the Mid-Autumn festival.
Demand falls during winter because palm oil solidifies. Traders saidsteady imports had cut local olein prices in China to 4,800 yuan ($579.92)a tonne this month against 5,000 yuan in July still much cheaper thanrival soyaoil which was on sale at 5,700 to 5,800 yuan a tonne.
"China is not going to import more soyaoil because everyone is waiting forthe Chicago market to fall further. We have bought plenty of soyabeanwhich is crushed into soyaoil," said the China-based dealer.
"Locally grown rapeseed is also available in the market now, and its onsale at 6,000 yuan a tonne," he said.
China's customs data showed the country imported 12.27 million tonnes ofsoyabeans in the first seven months of 2003, up 150 percent from the sameperiod last year.
"I think people are aware about the developments in China. I don't pay toomuch attention to the quotas because demand will fall anyway in winter.
Our main concern is India," said a trader. Some traders said India's palmoil imports might fall by 25 percent to 300,000 tonnes in August from amonth, due to the country's new rules on imports.
India, the world's top edible oil consumer, buys palm oil from Malaysiaand Indonesia.-Reuters