HONG KONG (May 15 2003) : Japan's import ban on Chinese poultry, sparkedby the discovery of bird flu virus, has added to worries in China whereSars is threatening to eat into domestic demand for meat and vegetableoils, traders said on Wednesday.

"It (the import ban) will definitely dampen demand for meal," said atrader in Singapore. "It is already running out of steam."

The traders said, however, some crushers in northern China were stillpicking up South American soya cargoes that were washed out, sold back tosuppliers at a fee, by buyers in the south, leaving total purchasingvolume pretty much unchanged.

"I feel the buying is slow, not quite as satisfactory as before. Butoverall it's still OK," said another trader at an international housebased in Shanghai, referring to the buying of meal.

"In terms of prices, we haven't seen any noticeable drop."

On Monday, Tokyo said it had temporarily banned imports of poultryproducts from China after its quarantine office detected the bird fluvirus in imported Chinese duck products.

Custom data showed Japanese broiler imports totalled 524,000 tonnes incalendar 2002, including 119,000 tonnes from China.

Some Asian traders suspected Japan's real concerns centred rather on theSars virus spreading in China, which now accounts for more than two thirdsof the world's total cases of 7,575.

"Since end-April nobody (in Japan) is interested in buying Chinesechicken," said one senior trader in Beijing.

"I think it (the ban) is mainly because of the Sars."

The first trader added a-day-old-chick prices had been low in the south asconsumers ate more fish products than poultry.

SOYA PLANTING UP, WASHOUT IN SOYAOIL: The traders said China had alsowashed out 70,000-100,000 tonnes of soyaoil before the May Day holidays tocash in on a rally in international prices only to come back again lookingfor more of the vegetable oil from South America.

While some said China was sealing soyaoil deals again, others weresceptical, given wide price spreads of about $70- $80 per tonne with palmoil and ongoing harvest of rapeseed.

"Nearby (soyaoil) demand is still good. But going forward, we don't know.With the Sars scare I don't now how much of the demand will be lost," saidone vegetable oil trader.

"With a big spread between bean and palm oil, we will probably see some ofthe demand switching to palm."

The traders said rains in the east had further trimmed Chinese rapeseedcrop to about 11.8 million tonnes, compared with initial estimates as highas 13 million.

Still it stood well above 10.53 million tonnes last year.

Farmers in south and central China had begun harvesting, while those inthe east were waiting for a sunny weather.

In northern China, farmers were planting more soyabeans instead of cornand rice, with many traders now expecting the acreage to rise by more thanfive percent from 2002, which saw a domestic soya output of 16.9 milliontonnes.-Reuters