China's palm oil demand may shrink in 2024 due to low soy oil prices
By Bernadette Christina and Danial Azhar
KUALA LUMPUR, March 6 (Reuters) -Palm olein imports to top buyer China could fall by 26% to 3.1 million metric tons in 2024 as the most widely used edible oil loses pricing edge over rival soy oil, an executive at Cargill Investments (China) Ltd said on Wednesday.
A record South American soybean crop has pushed down prices for the primary competitor, which typically trades at a premium to palm oil, hurting demand for the latter.
"If we assume the current palm oil soybean oil spread in both cash and futures forward market stays throughout the year, 2024 olein import could drop to 3.1 million tons from 4.2 million tons in 2023," Ryan Chen, a director at Cargill Investments (China) Ltd, said in an industry conference in Kuala Lumpur.
Palm oil output in top producers Indonesia and Malaysia has stagnated while demand is expected to rise due to biodiesel mandates, driving the prices up, while soy oil output is set to grow, industry analysts told the same conference.
However, palm oil's premium over soy and sunflower oils is expected to wear off by early May at the latest, as their prices are also expected to rise, industry analyst Thomas Mielke said.
Reporting by Bernadette Christina; editing by Milla Nissi
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