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KUALA LUMPUR, April 5-- China's threat to impose a 25-percent tariff on imported soybeans from the United States is expected to have a positive impact on palm oil-producing countries including Malaysia, as Chinese demand on the substitute oil may increase, said analysts Thursday. "Given that crude palm oil (CPO) can be a substitute for soybean oil, we believe Chinese tariffs on American soybeans can be good for the palm oil-producing countries, especially Indonesia and Malaysia as they account for about 84 percent of global palm oil supply," Affin Hwang Capital said in a note. It foresees the move to boost demand for Malaysian palm oil products, and help to further lower the country's stockpile levels. Malaysia's palm oil inventory rose 69.8 percent year-on-year to 2.48 million tonnes in February. The research house also expects the move to boost CPO prices. "There is a possibility of a short-term rally should this event materialize," it said while maintaining its CPO average selling price assumption for 2018 and 2019 at 2,600 ringgit to 2,500 ringgit per tonne. MIDF Research also said in a note Thursday that Chinese tariffs move is positive to CPO price as it expects higher China's demand on palm oil in the long run. While expecting China to increase soybean import from Brazil, the research house believes that the volume is not enough to compensate the lower volume from U.S. "In the long run, we expect lower soybean oil (which is a by-product of soybean crushing) supply in China. Palm oil stands to benefit from this as it is a common substitute for soybean oil for use in the food processing industry," it said. | 
