15/04/2009 (Pak Watan), Islamabad - Pakistan has made few purchases of palm oil this month after strong buying in the first quarter led to a glut, and buying is expected to remain slow at present prices, a top industry official said on Wednesday.

"The country overbought in the first quarter and stock levels remain very high. Because of the over-buying there's a local glut," said Rasheed Janmohammad, vice-chairman of the Pakistan Edible Oil Refiners Association.

"Buying for second quarter, commencing April, shipment was very slow. Buying has been very very slow in the last two weeks."

Pakistan, the world's fourth-largest buyer of vegetable oils, 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 oils a year, but produces only 500,000-800,000 tonnes of cottonseed, rapeseed and sunflower oil, relying on imports to meet about 80 percent of demand.

Traders went on a buying spree in the first quarter after sharp price swings last year prompted them to delay purchases.

Pakistan bought 166,140 tonnes of palm oil in February and 158,880 tonnes in January, according to the official data. Figures for March imports have not been released.

This week, the stock of oil products in tanks, including palm oil, palm oil olein, crude palm oil and soybean oil, stood at about 160,000 tonnes with another about 100,000 tonnes in the pipeline, Janmohammad said.

Firming prices in the international market over worries about low stocks in Malaysia have also contributed to a slowdown in purchases as the landed cost of imported oil was more than prices in the domestic market, traders said.

On Wednesday, Malaysian palm futures touched an 8-month high, with the benchmark third-month contract on the Bursa Malaysia Derivatives Exchange having risen by nearly half since the start of the year.

"There will be a little correction in the international market after which buying will slightly pick up, but at these levels Pakistan will not be an aggressive buyer," Janmohammad said.