Palm Imports by China Climbing as Quarantine Concern Eases
Palm oil imports by China, the biggest cooking oil consumer, may jump 14 percent in February on optimism stricter quarantine inspections won’t hurt trade.
Shipments will probably rise to as much as 400,000 metric tons from about 350,000 tons in January, the median of a survey of four researchers and one trader shows. That compares with 384,000 tons in February last year, customs figures show.
Increased purchases by China, the largest buyer after India, may extend a 5.5 percent advance in futures this year on the Malaysia Derivatives Exchange, the global benchmark. Tougher inspections on cooking oils from Jan. 1 to improve food safety raised concerns imports would decline. While seasonal demand and buying before an export tax change in Malaysia may boost deliveries, high inventories will probably cause a drop in full- year imports, according to the survey.
“Traders have stepped up purchases, anticipating increased spring demand and a tax hike in Malaysia,” said Cao Huimin, an analyst at China Cereals & Oils Business Net, a Beijing-based cooking oil researcher. There have been no reports of shipments being rejected for quality, she said.
Palm for May delivery gained 0.2 percent to 2,570 ringgit ($830) a ton in Kuala Lumpur today. Futures on the Dalian Commodity Exchange in China were little changed at 7,124 yuan ($1,142) a ton, taking their gain to 2.9 percent this year.
Malaysia, the second-biggest supplier, raised the duty for crude palm exports to 4.5 percent in March from zero in January and February, a statement on the Palm Oil Board website said on Feb. 15. Indonesia, the top producer, may keep its duty at 9 percent in March, according to the country’s palm association.
China’s purchases may expand as concern eases over the quarantine controls and as spring approaches, Desmond Ng, China manager for the Malaysian Palm Oil Council, said from Shanghai.
The pace of growth is limited by storage capacity, Ng said. Inventory at major ports totaled 1.09 million tons, 30,000 tons less than at the start of the month, Grain.gov.cn said in a report yesterday. Stockpiles had declined gradually from a record, it said. Inventories rose in December as buyers got in before the quarantine changes, Cao of China Cereals said.
Purchases for the full year may fall 6 percent from about 6.4 million tons in 2012, the survey showed. Shipments last year were the highest since 2009, customs numbers show.
Annual growth in cooking oil consumption will probably moderate over the next five years to 2 percent from 3 percent in 2007-2012 as there has already been a large shift by the middle class to diets higher in fats and protein, Chen Xuecong, vice president of Sinograin Oils Corp., said in November.
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