KARACHI, Jan 1: Local palm oil prices were stable during the past week on domestic buying and dealers said on Tuesday traders were building up stocks ahead of a traditional drop in the Malaysian palm crop.

“I am anticipating some aggressive buying in January and February as traders are likely to build up their positions before the drop in crop,” said Aminuddin, a palm oil importer.

He said the stock position in the local market was also depleting after the traditional peak demand of edible oil during Ramazan.

“The market in the medium term is bullish and prices are firm,” he said.

Another dealer at a palm oil brokerage house said traders in Punjab and NWFP expected a sizable demand from neighbouring Afghanistan.

“Buying for Afghanistan will also kick off by the end of January,” he said.

Traders in Malaysia anticipated that Pakistan’s palm oil imports could reach 220,000 tons a month over the next few months because of the prospect of exports to Afghanistan and a reduced cottonseed oil production.

Aminuddin said traders were now buying palm olein in bulk, taking advantage of a low import duty structure.

The government charges a fixed import duty of Rs9,100 per ton on palm olein and Rs10,900 per ton on palm oil.

Local dealers on Tuesday quoted palm oil on the local market at Rs1,370 per maund (37.32 kg), up Rs50, from the previous week’s level of Rs1,350 per maund.

The import price of palm oil was not available on Tuesday because of the closure of the Malaysian market.—Reuters