Chinese demand for palm oil set to drop

Malaysian palm oil futures ended higher on Wednesday as prices tracked rival oils on China's Dalian Commodity Exchange and production data released was within traders' expectations. (A motorcylcist rides past a palm oil tanker in a plantation in Johor. - REUTERS filepic)

KUALA LUMPUR: Palm oil demand from China, the world’s No.2 importer of the commodity, is set to drop in coming months as supplies of alternative edible oils flood local markets, industry sources said.

Sluggish Chinese appetite for palm oil, used in everything from preparing food to churning out biofuel, could pile further pressure on benchmark prices that have shed 15% since the start of the year due to expectations for rising output.