China's palm oil imports are likely to take a hit in the coming months as stockpiles at major ports have risen to near record highs of around 1.2 million tonnes on weak domestic demand, traders said on Tuesday. Lower palm oil demand in China, the world's second largest importer, could cap a rally in benchmark Malaysian futures which jumped to a 17-month high on Monday as hot and dry weather threatened production in Southeast Asia.
Traders estimated palm oil stocks at Chinese ports at between 1 million tonnes and 1.2 million tonnes, up from the usual 500,000 tonnes to 600,000 tonnes. "There are a lot of factors influencing palm oil prices, including the stockpiles that we have at the ports," one senior analyst with a Shanghai-based brokerage told Reuters on the sidelines of an industry conference in Kuala Lumpur.
"Chinese demand for palm oil normally picks up from April but this year it is not going to be good as there is oversupply in the domestic market," said the analyst, who did not want to be named because she was not authorised to talk to media.
