Wednesday May 26, 2004 - THE significance of China as the single largestimporter of Malaysian palm oil especially over the past five yearsstrongly reflects China’s growing domestic demand and confidence in thesupply and quality of the commodity.

Latest statistics from China’s General Administration of Customs revealsthat Malaysia alone took up the lion's share of almost 74% of palm oilimports into China last year.

It was estimated that 20% of the total palm oil imported by China wereused in manufacturing instant noodles, 63% for direct consumption inblended oil and 17% in other food applications.

Last year, Malaysia palm oil exports to China surged significantly to 2.5million tons from 700,000 tons in 1998.

Malaysian Palm Oil Promotion Council (MPOPC) chief executive Datuk HaronSiraj said the council’s latest Annual Report 2003 showed that China, witha population of 1.3 billion, was an important market in the global oilsand fats business.

He said China’s per capita consumption of edible oil had been increasingin tandem with its gross domestic product per capita.

However, despite being the largest producer of oilseeds in the world,China still depend on imports to satisfy its expanding domestic demand foroils and fats, Haron added.

The total import of vegetable oils by China last year reach 5.2 milliontons an increase of more than 60% compared with its import in 2002.

The MPOPC, which was incorporated in 1990 to assume the role of the PalmOil Promotion Fund Committee, is responsible for spearheading thepromotional and marketing of Malaysian palm oil to make it the leading oilin the global oils and fats market.

Last year, MPOPC promotional programmes for China were to a large extentdisrupted because of the Severe Acute Respiratory Syndrome outbreak, whichlasted several months.

However, it did not disrupt China’s import of Malaysian palm oil lastyear, which increased by 38.5% to 2.5 million ton from 1.8 million ton ayear earlier.

Haron said China’s edible oil market had to a large extent beenliberalised following its entry into the World Trade Organisation.

China’s tariff rate quota for palm oil last year of 2.6 million tons wasfully used, Haron said, adding that the quota this year would be raised to2.7 million tons.

However, a prominent palm oil exporter said it was waiting for anotherinteresting development the elimination of China’s quota system for palmoil by 2006.