KUALA LUMPUR, Nov 26: Pakistan’s palm oil imports may reach 220,000 tons a month over the next few months because of the prospect of exports to neighbouring 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 per cent 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 Ramazan.

Traders said freight rates from Malaysia and Indonesia to major buyers such as Pakistan and India were expected to increase soon because of strong demand.

Rates to Pakistan, for instance, hovered at $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.

India’s winter oilseeds production in 2001/02 (November-October) is expected to rise to 12.3 million tons from 10.85 a year ago because of good monsoon rains.

Some traders said China’s palm oil imports from Malaysia and Indonesia would be steady at 240,000-250,000 tons in November.

There was also talk China had used up most of this year’s import quotas, which totalled 1.4 million tons. China bought 174,008 tons of palm oil from Malaysia in October.

“We learn only around 170,000 tons is left from the quota. We also observe imports have already reached 1.8 million tons so far this year, which suggests that China is buying more oil,” said one trader.

China’s palm oil imports are projected to rise to 2.4 million tons in 2002, following its entry to the World Trade Organisation (WTO).—Reuters