Chinese net imports of oils and fats will continue to rise this season,after they had increased by 0.33 Mn T or 13% in Oct/Sept 2000/01. Highernet imports will be required since domestic production is expected to turnout insufficient, mainly due to the probable shortfall in oilseed imports.Palm oil exports from Malaysia to China accelerated in January andFebruary which indicates that Chinese imports turn out sizably above ayear ago this quarter. China’s importers have stepped up purchasesrecently in expectation of the allocation of quotas. The distribution ofimport quotas, scheduled for this week, has apparently been delayed. Itwill also depend on the timing of the issuing of the import licences towhat extent the earlier agreed palm oil import quota of 2.4 Mn T for 2002will be exhausted.Oilseed imports have been strongly biased towards soybeans at the expenseof rapeseed in the first half of this season. This had interestingimplications for the development of net imports of oils and fats: Importsof soybeans and rapeseed, calculated on an oil basis, declined below ayear ago since the reduction in imports of high oil-yielding rapeseed morethan offset the increase in soybeans. As shown above, we arrive at themopposite result when looking at the development of oilseed imports on ameal basis. As a result, oilseed imports had to be supplemented by an atleast slight increase in the net imports of oils and fats.In the second half of this season, net imports of oils and fats as well asof soybeans and rapeseed (oil basis) will probably decline from a yearago. As in the case of oilmeals, this follows largely from the prospectiveslowdown in oilseed imports, which will probably not be fully compensatedby higher imports of oils as such.However, one should not forget that such a reduction of total net importscan only be accomplished if domestic stocks of oilseeds as well as of oilsand fats are reduced substantially. We currently assume that stocks of themajor oils and fats are reduced by about 0.1 Mn T in the course of theseason 2001/02. This implies an unusually tight stocks/usage ratio of8.1%, versus 9.1% at the end of the preceding season, and leaves little orno leeway for further reductions next season.

8 March, 2002 (OL WORLD FLASH)