Pakistan’s import of palm oil in February will fall after heavy purchases in January, but buying will return to normal levels in March to keep pace with demand, an industry official predicted on Monday.
Pakistan imported a total of 189,180 tonnes of palm oil from Malaysia in January, cargo surveyor Societe Generale de Surveillance said on Monday, and the official said about another 10,000 tonnes was bought from Indonesia.
“Pakistan has practically overbought for January and vessels are on the high seas,” said Rasheed Janmohammad, vice-chairman of Pakistan Edible Oil Refiners Association, a leading organisation of palm oil refiners.
“There is some glut in the market … Because of the carryover stock and slow market, Pakistan will be buying between 75,000 and 100,000 tonnes of palm oil in February,” Janmohammad told Reuters in an interview.
But as buying in February would ease and stocks from January would be consumed, Janmohammad foresaw palm oil purchases to pick up to usual levels in March to between 125,000 tonnes and 140,000 tonnes.
Pakistan is the world’s fourth-largest buyer of vegetable oils, and imports a mix of refined and crude palm oil from Malaysia and Indonesia, the world biggest producers.
It consumes about 3 million tonnes of edible oil a year, but produces only 500,000-800,000 tonnes of cottonseed, rapeseed and sunflower, relying on imports to meet about 80 percent of demand.
Janmohammad said prices of RBD palm oil and palm olein had come down in the last two weeks, but in spite of international markets going down, the landed cost of palm oil in Pakistan had gone up because of depreciation of the Pakistani rupee.
Alongside heavy palm oil purchases in January, Pakistan has also bought a total of 400,000 tonnes of canola seed for the January-March quarter, with an oil component of 180,000 tonnes, that will further boost stocks, Janmohammad said. Out of that, two cargoes of 35,000 tonnes each of canola oilseed from Australia have already arrived, traders said.
Pakistan bought about 95,000 tonnes of sunflower and canola oilseed in October.
As of Feb. 1, Pakistan’s stock of imported palm oil, palm olein and crude palm oil stood at 110,000 tonnes, Janmohammad said. “Stock in hand is not very big but arrivals (from January buying) are huge.”
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