* Rapeseed oil, soyoil pouring into China markets
* That is stifling appetite for palm oil imports
* Low palm demand seen continuing until Mid-Autumn festival
By Emily Chow
KUALA LUMPUR, May 24 Palm oil demand from China,
the world's No.2 importer of the commodity, is set to drop in
coming months as supplies of alternative edible oils flood local
markets, industry sources said.
Sluggish Chinese appetite for palm oil, used in everything
from preparing food to churning out biofuel, could pile further
pressure on benchmark prices that have shed 15 percent
since the start of the year due to expectations for rising
"The number of cargoes to China for June to August is very
low ... badly below normal, maybe less than 100,000 tonnes a
month," said a Shanghai-based analyst at an asset management
firm, declining to be identified as he was not authorised to
speak with media.
The country imported over 200,000 tonnes of palm last June,
with shipments typically sent from top producers Indonesia and
The drop comes as alternative edible oils pour into Chinese
markets, with the country selling rapeseed oil from national
stockpiles and soybean crushing volumes shooting up.
Low domestic edible oil prices are expected to cap palm oil
demand until the Mid-Autumn festival in October, when appetite
typically spikes, analysts said.
Those weak domestic edible oil prices pushed the spread
between Dalian soybean oil and palm oil to its
narrowest in nearly a decade in April.
That prompted Chinese buyers in early May to cancel three
palm oil cargoes for July and August, according to a report by
China's National Grain and Oils Information Centre.
"In the short term, we may see China pick up more soybeans
versus crude palm oil given the soy meal affordability," said
William Simadiputra, plantations equity research analyst at DBS
Monthly soybean imports to China rose to 8.02 million tonnes
in April, a record for the month, supported by strong demand for
soymeal. Imports are expected to rise further, as China
typically buys large volumes of soybeans from May to August.
Meanwhile, palm oil prices are expected to fall towards
year-end as output recovers in the wake of an El Nino weather
pattern in 2015-16 and in line with seasonal trends.
However, declines could be curbed as Malaysian output in
March and April – typically when production starts to pick up –
saw its lowest monthly growth in three years.
($1 = 4.2940 ringgit)
(Reporting by Emily Chow; Editing by Gavin Maguire and Joseph