KUALA LUMPUR (REUTERS) - Malaysia expects palm oil demand in China to remain strong despite the coronavirus epidemic, as people forced to stay indoors eat more packaged foods, such as instant noodles, that use a lot of the edible oil, the industry regulator said.

Brokers and traders have forecast palm oil prices could fall over the coming weeks if the spread of the deadly virus continues to disrupt travel and leads to a wider shutdown of offices, malls and factories.

Palm oil is used widely in foodcourts and by catering companies in China, Malaysia's second-biggest customer for the oil behind India.

However, the Malaysian Palm Oil Board (MPOB) said on Tuesday (Feb 4) that while the outbreak had reduced consumption of the oil at restaurants, this would be compensated by higher demand for packaged foods such as instant noodles.

"Instant noodles use a lot of palm oil. As people stay at home to reduce their exposure to the virus, they will eat at home more and this will definitely increase the demand for instant noodles," MPOB director-general Ahmad Parveez Ghulam Kadir told reporters on the sidelines of an event.

"While there are issues with exporting, the demand for palm oil (in China) will always remain."

Malaysia's minister in charge of palm oil, Ms Teresa Kok, told reporters at the same event that the country had not seen any delays in shipments to China.

China bought 2.5 million tonnes of palm oil last year from Malaysia, the world's second-biggest producer, while India imported 4.4 million tonnes, according to Malaysian Palm Oil Council figures.