KUALA LUMPUR, Jan 2: Tension between Pakistan and India, both major edible oil buyers, may boost Asia’s palm oil market, traders said on Wednesday.

“We expect to see some good buying from Pakistan in the next few days because tension is rising there,” said one trader who deals with Pakistani buyers.

“Pakistan buyers are stocking up, just in case. I expect imports to reach 200,000 tons in January, but I don’t think war will happen.”

“Importers are also buying oil for sales to neighbouring Afghanistan,” he added.

India, the world’s largest edible oil importer, was Malaysia’s biggest palm oil buyer in 2000, taking 2.03 million tons, down from 2.38 million tons in 1999.

Pakistan bought 1.09 million tons in 2000, up from 1.02 million tons in 1999.

Some traders said Malaysia and Indonesia, the world’s largest palm oil producers, exported around 110,000 tons of palm oil to Pakistan in December. Others said the exports could reach around 180,000 tons in January.

India’s palm oil purchases were seen steady at 330,000 tons in the next few months, with the majority of the oil coming from Malaysia.

Dealers in Pakistan said a seasonal drop in the Malaysian crop and depleted Pakistan stocks had also encouraged traders to stock up. Some traders in Malaysia said stocks in Pakistan had fallen to around 30,000 tons from the normal 60,000 and 70,000 tons.

Traders and analysts said palm oil trees in Malaysia were entering a cycle in which they would produce less fruit, which would run until February.

Private forecaster Ivan Wong has forecast December palm oil output at 860,000-865,000 tons, down from 1.07 million tons in November. January output may increase to 980,000-985,000 tons, but is expected to fall to 770,000-775,000 tons in February, he said.—Reuters