KUALA LUMPUR (June 25 2003) : China is actively seeking RBD palm olein toreplenish stocks and prevent further rises in domestic prices, traderssaid on Tuesday.

China, one of the world's main edible oil consumers, has so far booked260,000 tonnes of olein from main producers Malaysia and Indonesia forJune shipment, traders said.

It has also bought close to 200,000 tonnes of South American soyaoil. Sometraders in China said olein prices had risen to 5,350 yuan ($646.37) atonne this month against 4,900 yuan in May because of tight supplies andimproving demand.

China normally imports around 250,000 tonnes of olein a month.

"People have become more health-conscious after the Sars outbreak," saidone Chinese trader, referring to the deadly respiratory disease that hadkilled around 800 people worldwide since spreading from China this year.

"I think people have begun to change their diet. Those in the countrysideare using more vegetable oils than animal fats. Even if the palm oil pricegoes up further, you will still find buyers," he said.

Palm olein prices have risen by nearly two percent in the past monthbecause of tight supplies in Malaysia, the world's largest producer, andsteady overseas demand.

Olein was quoted at $442.50 a tonne FOB on Tuesday.

"China wants to buy more, but the problem is people here are short ofolein. The local price is high in China, that's why they want to keep itdown by bringing in more supplies," said one dealer in Malaysia.

"I think six vessels or 60,000 tonnes of olein have been booked forshipments to China in the first week of July," he added. China, which hasbeen Malaysia's main palm oil buyer in the past few months, bought 163,143tonnes from June 1 to June 20, up from 156,428 tonnes in the first 20 daysof May, according to cargo surveyor SGS.-Reuters