17 May 2002 (Business Times) - MALAYSIA and Indonesia are expected tobenefit from a squeeze in vegetable oil supplies in China due to severeweather conditions in the republic.Malaysian Palm Oil Association chief executive M.R. Chandran said China isexpected to face a shortfall of between 500,000 tonnes and 750,000 tonnesin its current rapeseed harvest.“This will put pressure on the republic to increase its intake of palm oilfrom Malaysia and Indonesia in the next month or so,” Chandran toldBusiness Times in Kuala Lumpur yesterday.“Probably for this reason, China held back purchases earlier in theyear... it wanted to wait until rapeseed harvesting started, then decideon imports,” he said.China was the third biggest buyer of Malaysian palm oil last year, taking1.28 million tonnes worth RM1.23 billion.India and the European Union were the top two customers last year, buying2.03 million tonnes and 1.601 million tonnes, respectively.According to the Malaysian Palm Oil Board website, palm oil exports toChina were a sluggish 40,573 tonnes in January before surging to 136,712tonnes in April.“Should monthly sales to China be maintained at the 150,000-tonne level, Iam optimistic total exports to the republic will hit 1.6 million-1.8million tonnes this year,” Chandran added.China capped palm oil imports at 1.4 million tonnes last year but hasincreased the quota to 2.4 million tonnes for this year following itsformal entry into the World Trade Organisation in December 2001.Malaysia and Indonesia are the world’s top two producers and exporters ofpalm oil respectively.Last year, Malaysia produced 11.803 million tonnes of the commodity, ofwhich 10.61 million tonnes were exported to 140 countries. Indonesiaproduced 7.48 million tonnes and sold 4.8 million tonnes abroad.

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