15/12/05 SHANGHAI (Dow Jones)--China's palm oil imports are expected to rise to 4-4.5 million tons per year in the next five years after the country eliminates its quota system from 2006, said the chief executive officer of the Malaysian Palm Oil Promotion Council.

"(As) there will be no more quota (in the years to come), we feel that China is capable to take in even more palm oil for industry use and also for household consumption," Datuk Haron Siraj told Dow Jones Newswires in a recent interview.

Siraj's estimate is slightly higher than the around 3.9 million tons of imports estimated by industry analysts for this year, as China's demand for palm oil imported for food use has almost been saturated.

"The increase (in China's palm oil imports) will be mostly contributed by the demand from China's non-food sector, such as palm oil chemicals," Siraj said.

About 70% of China's palm oil imports are for food use, while the remaining 30% is for industry use, such as for the printing industry and in lubricant.

However, Siraj didn't rule out China's potential to buy more palm oil for food use in the next five years, though the increase is expected to be limited.

He believes there is still opportunity for China to increase the use of all kinds of oils, including palm oil, as Chinese people are expected to become more health-conscious.

The World Health Organization recommends human to take 20-22 kilograms of oil and fat per capita yearly, while Chinese residents currently take 18 kg per capita.

"We are doing a lot of campaigning (to introduce) the health and nutritional attributes of palm oil (to China) and we therefore expect bigger (consumption) by Chinese," he added.

Malaysia is the world's largest palm oil exporter to China, accounting for 70% of China's total palm oil imports per year.