SINGAPORE, Sept 25 (Reuters) - China, the world's second largest edible oil buyer, will not seek more nearby shipments for palm oil despite sharp price declines recently as port stocks of edible oils remained high, traders said.
Refined palm olein, used in cooking oil, trades at around 7,150 yuan ($1,100) per tonne at the China's southern port of Guangzhou compared to above 9,500 yuan for competing soybean oil.
While the steep discount should attract more cargoes, stocks at China's ports almost double in end August from a year ago that has prompted traders to slow their orders.
Also, rising stocks in Indonesia and Malaysia, world's top palm oil producers, have made traders wait for further declines in benchmark Bursa Malaysia palm oil futures 0#FCPO: that set the tone for physical prices.
"Stocks in Malaysia could still go higher in September and October, so although current price discount is attractive, the discount may still grow steeper," said a Shanghai-based trader.
Traders and analysts said China's port stocks stood at 700,000-750,000 tonnes in August, easing from almost one million tonnes seen in May, but remaining much higher than the 450,000-500,000 tonnes seen last year.
China has enough edible oil stocks to fulfill demand for the Golden Week holiday from Sept. 30 to Oct. 7, said another vegetable oil analyst also based in Shanghai.
The stock buildup also makes it easier for China to stabilise local edible oil prices and rein in inflation, which ticked up to 2 percent in August from July's 30-month low of 1.8 percent.
A rush of orders for palm oil could begin in November and December as traders begin to stockpile for Lunar New Year in February next year, analysts said.
But some traders said a slowdown in the Chinese economy -- the world's second largest -- could limit orders. Recent data shows manufacturing in China contracted for the 11th month in a row in September, setting the stage for a seventh quarter of slowing economic growth.
"It depends on the economy of China also. If the economy picks up, they may start to import a lot more," said a regional vegetable oil trader in Singapore. ($1 = 6.3093 Chinese yuan)
