29/12/06 (The Financial Times)KARACHI - Palm products import has been halted as international prices have hit $650 fence on Thursday's trading. Importers said that till Wednesday, a few orders were placed in the international market for import of palm products, however, it was suspended when the prices crossed $640 per ton peak.

"I don't think that any trader took part in Thursday's trade as it is no longer viable," said a Karachi-based importer wishing not to be quoted. He said that palm products import would resume when the rising world's prices would come down gradually.

"The imported commodity would get costlier in the domestic market if it is imported at such higher rates ranging $640-$650 per ton," he mentioned. He said that heavy rain and flood struck the Malaysian palm cultivation regions - one of the world's biggest palms fruit producers, as a result, prices of palm products have started mounting in the international market.

He said that presently price of palm products have reached $650 per ton of new peak, which was $625 per ton on Tuesday, indicating an upsurge of $25 per ton during last two days. He said that importers are meticulously monitoring the international market, specially the Malaysia to resume the import of palm products.

He said that till Wednesday we have placed the orders for the import of palm products but now this trade is not viable to place fresh orders and no single import order has been placed on Thursday due to the price hike in the international market.

A serious edible oil crisis may hit the country's market as the international palm product prices have reached its new heights after breaching the $650 fence, he added. "We are paying Rs 9000 per ton taxes to the government on the import of palm products and due to high duties and taxes, the commodity becomes quite expensive, when it arrives here, therefore in such a situation we can not offer any concession to the consumers," said another importer.

"The domestic needs of edible oil would be met from already imported stocks, while we are expecting more increase in the prices of local manufactured ghee," he said. The prices of locally manufactured Ghee have further increased by Rs 10 on a 16-kg canister and brought the prices to Rs 1,040 per 16-kg canister from Rs 1,030, while companies halted the supply of ghee, said a trader.

The country's edible oil consumption stands at around 2.2 million tonnes annually, around 0.6 million tonnes is supplied by some 128 small and big edible oil refineries across the country, while the remaining gap was to be filled by imports, mainly from Malaysia and Indonesia.