China buying more Indonesia palm oil
Palm oil exports to China from top producer Indonesia look set to rise this year, a Jakarta-based industry group said on Monday, despite fears that the slowdown in the world's second largest economy may reduce consumption of the edible oil. China is the world's largest buyer of palm oil after India, importing 5.9 million tonnes in 2011 or 4 percent more than the previous year.
Copyright Reuters, 2012
Indonesia's palm oil exports to China in the first seven months of the year rose 14 percent from the same 2011 period to 1.25 million tonnes, according to Reuters data. With China's economy growing at its slowest pace in three years, many in the palm oil industry are worried that demand for their product may weaken, but Fadhil Hasan, executive director of the Indonesian Palm Oil Association (GAPKI) told Reuters Chinese purchases were actually rising.
"Indonesian's palm oil export to China in 2012 are still increasing even though the Chinese economy is slowing," Hasan said, without giving a specific figure. "China is still the third biggest importer for Indonesian palm oil. In the second half, our palm oil exports to China are normally higher than the first half because there are many festivities and religious events in China," he added.
Palm oil, the world's most traded and consumed edible oil, is used mainly as an ingredient in food such as biscuits and ice cream, or as a biofuel. Analysts expect palm oil consumption to increase over the next few months as more consumers turn to substitutes for soybean oil after drought in the United States sent soybean prices to record highs in September.
"Global supplies of other vegetable oils are also predicted to be tighter," Hasan said. Indonesia's palm oil output is expected to rise this year to between 23 million and 25 million tonnes, compared to 22.5 million in 2011. China's palm oil imports from Malaysia fell 3 percent to 1.8 million tonnes in January to July, compared to a 14 percent rise in Indonesian shipments.