Kuala Lumpur, Sept 18 – Importers from China, the world’s largest vegetable oil buyer, have defaulted on at least 100,000 tonnes of RBD palm olein after prices fell nearly 15 percent this week, traders said on Thursday.
“Up to this point, about 100,000 tonnes of refined palm olein have been defaulted, and there could be much more up for renegotiation,” said a leading Singapore trader who mostly deals with China.
A Malaysian trader familiar with the deal said the number of defaults could snowball if prices of the vegetable oil fell past 2,000 ringgit.
Both traders said the vegetable oil shipments were headed for northern Chinese port city of Tianjin and Guangzhou port.
Malaysian crude palm oil futures shed 0.4 percent to 2,032 ringgit a tonne by 0329 GMT, weighed down by talk of palm oil cargoes getting defaulted or deferred.
News of the China defaults comes on the heels of Indian palm oil buyers trying to defer some shipments on Wednesday after a heavy sell-off in vegetable oil markets, while traders said Pakistan had yet to cover its needs for the fourth quarter.
In the last round of steep price falls in August, India and China cancelled or renegotiated around 800,000 tonnes of palm oil deals.
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