Palm oil inventories in China, the second-biggest importer, rose to a record as inbound shipments outpaced consumption, according to China Cereals & Oils Business Net.
Stockpiles at coastal ports exceeded 1.5 million metric tons, compared with 1.46 million tons a month ago, said Liu Xianwu, general manager of the research firm.
High inventories may begin to slow China’s purchases and weigh down prices, which have fallen 4.8 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 today.
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.”
Palm oil for July delivery rose 1.4 percent to 2,320 ringgit ($776) a ton at 11:34 a.m. local time on the Malaysian bourse.
Indonesia and Malaysia are the world’s biggest producers of the tropical oil and India is the largest buyer.
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Source : Bloomberg