YOGYAKARTA: China will order more palm oil cargoes from July
onwards to stock up for the festivals starting from September,
southeast Asian exporters and Chinese traders said yesterday.
Palm oil imports by the world’s No. 2 vegetable oils buyer will show
only modest growth thanks to a high soyabean crush, although China’s
trade freeze on Argentine soyaoil may give an upside to palm oil, they
said.
China tends to build up stocks two to three months
ahead of festivals and this year the Mid-Autumn festival falls on the
third week of September, while the National Day holiday is stretched
over the first week of October.
It gets the bulk of its palm
oil needs from Malaysia, the second largest palm oil producer in the
world, although imports are increasingly coming from top supplier
Indonesia.
“Demand is not in dire straits,” a Malaysian trader said on the
sidelines of an industry conference in this Indonesian city.
But stocking up for festivals in July could see the palm oil futures
recoup some losses and comes at a time when output, particularly in
Malaysia, recovers after months of prolonged yield stress.
“I suspect the Chinese are waiting for the market to go down further,
so they can come in and make a killing,” an Indonesian palm oil trader
said.
“My associate company in Malaysia has received many
enquiries from the Chinese and they have also called us in Indonesia.
They are timing their purchases very wisely.”
China this
week bought refined, bleached and deodorised palm olein at
US$805-US$810 (RM2,632-RM2,650) a tonne, cost and freight (C&F),
Malaysian and Indonesian dealers said. The product is processed into
cooking oil and used for manufacturing noodles and sweets.
Planters with extensive refinery businesses and estates in Malaysia and
Indonesia such as Singapore’s Wilmar International as well as
Malaysia’s IOI Corp and Kuala Lumpur Kepong trade regularly with
China.
However, traders said India’s palm oil imports ahead of
its festival season will tumble 30 per cent to 1.13 million tonnes for
July-September shipments from a year ago, on a high domestic oilseed
crush.
India, the world’s largest consumer of vegetable oils,
will mark a string of religious events, starting with the Muslim holy
month of Ramadan in August and ending with the Hindu festival of Diwali
in November.
Last year in the July-September run up, India
bought a record 1.6 million tonnes of palm oil products that consist
mainly of crude palm oil with smaller quantities of refined palm olein
and palm kernel oil, industry data showed.
“We are not going
to make much of an impact on India this year,” said an Indonesian palm
oil exporter.
“Although we still have market share, the Indian
middle class can now afford to pay the slight premium for soyaoil since
the economy is strong and there are ample soyaoil supplies that
brought down the prices.” – Reuters
Source : Business Times
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