SINGAPORE, May 25: Asian buyers of canola, a cooking oil in strong demand as eating for health becomes a regional trend, are jittery about Australian supplies because of the return of drought, traders say.

Australia is a main canola supplier to eastern Asia and the subcontinent, especially the fast-growing Pakistan market.

“Buyers are starting to get concerned,” one Australian trader said, adding that Asian importers would closely monitor Europe’s approaching harvest and the Canadian crop now being planted.

Australia is the second-largest canola exporter in the world and a key supplier to Europe and Asia.

Sales in recent years have also swung to premium-paying Pakistan, the world’s fourth largest consumer of vegetable oils with domestic demand of 2.5 million tons producing 10 per cent annual growth in canola demand.

From total exports of 700,000 tons to 900,000 tons from its last crop, Australia shipped 100,000 tons to 200,000 tons to Pakistan, an Australian trader estimated.

“We’re constantly talking with them about opportunities,” another trader said of Pakistan, which bids for Australian canola toward the end of the calendar year at harvest time.

“Even when canola oil prices are higher, we don’t see a slow down in consumption,” Syed Yawar Ali, Chairmman of the Vanaspati Manufacturers Association, said. “People are willing to pay that kind of premium for canola,” he said.

Sheraz Ahmed, a canola importer in Multan, expects canola imports to grow by six to seven per cent a year after leaping to 700,000 tons in the year to June 30 last from 320,000 tons in 2000-01.

Syed Yawar sees even higher import growth for the uncrushed oilseed of 10 per cent from Canada, Europe and Australia.

“As people in Pakistan are getting more health conscious and are eating less fat, there is a gradually shift towards canola oil,” Ali told Reuters. “For Pakistan, the growth will be more in canola oil demand and less in palm oil.”—Reuters