Pakistan palm oil demands to benefit Southeast Asia

Pakistan palm oil demands to benefit Southeast Asia

Lewa Pardomuan, Reuters, Kuala Lumpur

Pakistan's palm oil imports may reach 220,000 tons a month over the next few months because of the prospect of exports to neighboring Afghanistan and a reduced cottonseed oil crop, traders said on Monday.

Pakistan normally buys 80,000 tons of palm oil a month from the world's largest producers, Malaysia and Indonesia.

"We expect strong demand to continue until March. When things are settling down, Pakistan will be exporting a lot of oil to Afghanistan," said one trader in Malaysia.

"About 70 percent of the oil shipped to Pakistan will come from Malaysia and I expect imports to reach 220,000 tons in November and December each," he added.

Some traders dealing with Pakistan said rising imports also stemmed from several purchases by the United Nations to help the Afghan refugees.

Other factors included a smaller local cottonseed oil crop, which is expected to fall 50,000 tons to 400,000 this year, and better demand during the Muslim Ramadhan fasting month.

Rates to Pakistan, for instance, hovered at US$26-$28 a ton this week from $23-$24 in early October.

"I am sure India's imports will reach 350,000 tons in November and December respectively. They have no choice but to buy palm oil because of tight soyoil stocks," said one trader.

"Farmers in India are selling their winter oilseed crop, but the oil is still in the hands of local buyers who will only release it to the market in the future. India can't crush the whole crop because of its limited crushing capacity," he said.

India, the world's largest edible oil importer, normally buys 250,000 tons of palm oil a month from Malaysia and Indonesia.

India is expected to continue buying palm oil until March because South American soyoil coming from the next harvest will only reach the market in April.