19 February, 2002 (Business Times) - CHINA will officially announce itscrude palm oil (CPO) import quota totalling 2.4 million tonnes for 2002 onThursday.Malaysian Palm Oil Association chief executive M.R. Chandran said China’sState Development and Planning Commission (SDPC) will on that day issuethe certificates of eligibility to the republic’s CPO importers.“Under the system, importers will have until February 25 to apply and fillin the certificates.“The importers will only know whether they are eligible to import theirdesired CPO amount by March 5,” Chandran told Business Times in KualaLumpur yesterday.Chandran said SDPC will first process the applications and the amount ofCPO each importer wishes to import before giving the stamp of approval onMarch 5.“SDPN has the authority to determine and make changes to the finalallocation of CPO that each importer can be allowed to import,” saidChandran.He added this time around, 66 per cent or about 10 companies from theprivate sector will be allowed to import while the rest will be made up ofstate-owned agencies.Previously, only state-owned agencies were allowed to import CPO.The announcement of the long-awaited quota is long overdue. Traders havewidely speculated that the quota will be announced in the first week ofJanuary and the latest by the Lunar New Year last Tuesday.Traders have estimated that out of the 2.4 million tonnes quota, Malaysia’s CPO exports may well account for up to 70 per cent or 1.68 milliontonnes.The quota is open to all CPO producers in the world which include Malaysia’s biggest competitor, Indonesia.Malaysia accounts for up to 50 per cent of the world’s CPO productionwhile Indonesia constitutes about 30 per cent.China, Malaysia’s third biggest CPO buyer last year at 1.02 milliontonnes, previously announced its CPO quota twice a year.In 2000, the quota was 1.5 million tonnes, of which it bought 800,135tonnes.Last year, the republic imposed a quota of 1.4 million tonnes of which itbought 1.02 million tonnes.It usually announces the first tranche of 700,000 tonnes in March followedby the second tranche of 700,000 in July.But the quota has been raised to 2.4 million tonnes since its full-fledgedformal entry into the World Trade Organisation (WTO) last December 12.Industry observers had also said that China’s entry into the WTO willboost Malaysia’s palm oil exports to the republic by 64 per cent byyear-end to 1.68 million tonnes from last year’s 1.02 million tonnes.Under a WTO ruling, China is required to open up its market and graduallyremove trade barriers and tariffs on various goods which include palm oilby 2005.Chandran said SDPN also announced CPO quota for 2003, 2004 and 2005 whichstand at 2.6 million tonnes, 2.7 million tonnes and 2.88 million tonnes,respectively.SDPN has also announced the quota for soyabean which stands at 2.518million tonnes for 2002, 2.5 million tonnes (2003), 2.85 million tonnes(2004) and 3.26 million tonnes (2005).Rapeseed quota for 2002 stands at 770,000 tonnes, 880,000 tonnes (2003),996,000 tonnes (2004) and 1.13 million tonnes (2005).Chandran said soyabean quota for 2002 was supposed to be at 2.2 milliontonnes but has been raised to 2.5 million tonnes, probably due to cheaperArgentine soyabean at the moment.“As a result of the devalued Argentine peso at the moment, China hasprobably decided to cash in on the cheaper soyabean now rather thanlater,” he said.He added that the Chinese Government will also stick to its present CPOduty of 9 per cent for every tonne imported like before.Malaysia is the world’s largest CPO producer, exporting 9,081,495 tonnesworth RM12.47 billion in 2000 compared with an all-time high of RM21.3billion in 1998.Meanwhile, third-month May CPO futures contract on the MalaysianDerivatives Exchange closed RM35 higher at RM1,162 a tonne after breakingthe key resistance of RM1,150 a tonne. Volume was 2,717 lots.