KUALA LUMPUR, Dec 11 (Reuters) - China will use up all its palm oil quotain 2001 to make way for huge imports next year following its entry to theWorld Trade Organisation (WTO), traders said on Tuesday.The world's most populous nation is set to import 2.4 million tonnes ofpalm oil in 2002, up from this year's 1.4 million tonnes, as requiredunder the terms of joining the WTO.China, which formally entered the world body on Tuesday, buys palm oilmainly from Malaysia and Indonesia, the world's largest producers."There is nothing much left on the quota. I last heard some 30,000-40,000tonnes were still available," said one trader in Kuala Lumpur.Some traders say China holds the trump card as to whether Malaysia's crudepalm oil futures <0#KPO:> will test this year's high of 1,315 ringgitrecorded on August 8.In the past few days, the market was mostly driven by anticipation offresh purchases by China despite the absence of official word from Beijingon when it will announce the quota.By midday on Tuesday, the benchmark third-month February contract was down nine ringgit at 1,172 ringgit ($308.42) a tonne ahead of freshestimates for November output, end-month stocks and exports.Volume was extremely thin at 197 lots.

GENERAL FEELING

But there is a general feeling among players China will utilise the palmoil import quota first until soyoil prices ease in April with the start ofSouth American soybean crop. China may then use the soyoil quota, whichstands at 2.52 million tonnes in 2002.Palm oil is now at a discount to its direct competitor, soyoil.Spot crude soyoil was last quoted at $370 a tonne FOB Argentine comparedwith RBD palm olein at $327 a tonne FOB Malaysia."Everybody is aware there will be 2.4 million tonnes of quota available in2002. It's just a question of when they are actually going to the market,"said a trader."I think what China will do is utilise all the old quota. Then they willissue the new quota, let's say, in the middle of January," he added.China imported 1.02 million tonnes of palm oil from Malaysia in 2000, upfrom 800,135 tonnes in 1999."I think palmoil is going to benefit the most. China will be buying morepalm oil because soyoil is more expensive and there's a longer distance toship the oil to China," said another trader.Traders said the export figures for December 1-10 issued to cargo surveyorSGS showed China had intensified its purchases, suggesting the country wasfinishing up the present import quota.SGS said China was the biggest buyer of Malaysian palm oil for the first10 days of December, taking 63,364 tonnes, followed by India which bought61,055 tonnes.($1=3.8 ringgit)