China Palm Oil Inventory Seen at Record May Weigh on PricesBloomberg News
Palm oil inventories in China, the world’s second-biggest importer after India, rose to a record as inbound shipments outpaced consumption, according to China Cereals & Oils Business Net.
Stockpiles at the country’s major ports this week exceeded 1.5 million metric tons, compared with 1.46 million tons a month ago, Liu Xianwu, general manager of the Beijing-based research firm, said in an interview today.
High inventories may begin to slow China’s purchases and weigh down prices, which have fallen 4.6 percent on Bursa Malaysia Derivatives this year after slumping 23 percent in 2012. Liu maintained his forecast from last month that imports will reach 5.95 million tons for the 12 months through Sept. 30, little changed from a year ago.
“The high inventory will persist in the next few months, which will exert pressure on prices and slow imports,” he said by phone from Beijing.
Monthly imports from April to September may be about 400,000 tons to 500,000 tons, compared with 591,223 tons in March, Gao Yanbin, director of research at Jinshi Futures Co., said by phone from Shanghai.
“Some big companies are saying they won’t import anymore in the next few months and instead they’ll buy the cheap and abundant supply already imported,” Gao said. “If that’s the case, we won’t see much growth in China’s imports.”
Crude palm oil for July delivery rose 1.7 percent to 2,326 ringgit ($778) a ton at 3:42 p.m. local time on the Malaysian bourse. The contract on the Dalian Commodity Exchange, which is for refined palm oil after adjusting for import taxes and processing, rose 2.6 percent to close at 6,120 yuan ($996) a ton.
Indonesia and Malaysia are the world’s biggest producers of the tropical oil and India is the largest buyer.
— With assistance by William Bi