Palm-Oil Imports Into Pakistan May Drop as Floods Curb Demand, Traders Say

Pakistan, the world’s third-biggest importer of palm oil, may buy 10 percent less of the commodity in October and November than in July after the country’s worst- ever floods destroyed villages, a traders’ group said. 

“Who will buy the oil when there are no people to sell it to?” said Ikram Chaudhary, secretary of the Pakistan Edible Oil Refiners Association, in a phone interview from Islamabad. “Our imports may decline after floods washed away our selling points.” Imports in July were 147,666 tons, according to the country’s Federal Bureau of Statistics. 

Pakistan’s record flooding, which has begun to recede in some places, has claimed the homes and livelihoods for 17.2 million people and killed more than 1,500, the United Nations Office for the Coordination of Humanitarian Affairs said. A majority of the displaced belong to rural areas, where palm oil is used to make ghee, a local cooking fat. 

“Initial estimates tell us that our orders for October- November may be affected,” said Chaudhary. 

Palm oil has advanced 18 percent from near an eight-month low on July 7, driven by festival demand in Asia. Futures for November delivery declined 1.1 percent to 2,644 ringgit ($850) at the 12:30 p.m. trading break in Kuala Lumpur. Prices jumped 1.8 percent to 2,674 ringgit, the highest level since Aug. 16. 

Palm oil imports may climb to as much as 1.85 million tons this year from 1.75 million tons in 2009, Rasheed Janmohammad, vice chairman of the refiners association, said Aug. 5. 

Pakistan consumes about 3 million tons of vegetable oils annually. It buys palm oil from Malaysia and Indonesia, the top producers, and rapeseed oil from Canada, Australia and Europe, according to the refiners’ association.Source: Bloomberg