16/03/2010 (Reuters), Islamabad - Pakistan's palm oil imports are seen down in March as ample stocks will likely limit incoming shipments to around 118,000 tonnes, a top industry official said on Tuesday.

Malaysia shipped 68,450 tonnes of palm oil products to Pakistan between March 1-15, the Malaysian cargo surveyor Societe Generale de Surveillance said, and the official said Pakistan expected another 40,000-50,000 tonnes for March shipment.

"Buying in March remained slow because of the carryover stock mainly from the overbuying in January to the tune of 200,000 tonnes," said Rasheed Janmohammad, vice-chairman of Pakistan Edible Oil Refiners Association, a leading organisation of Palm oil refiners.

"But coverage for April at the moment is zero. They (traders) haven't covered a single tonne so far for the next month which I am expecting to be 125,000 tonnes."

Traders echoed Janmohammad's view saying they expect buying in April.

Palm oil prices in the international market are coming down, said Janmohammad, who expected the prices to stabilise this week after which Pakistani traders would start purchases for April

As of this week, Pakistan's stock of imported palm oil, palm olein and crude palm oil stood at 145,000 tonnes, Janmohammad said.

Pakistan is the world's fourth-largest buyer of vegetable oils, and imports a mix of refined and crude palm oil mainly from Malaysia, and also from Indonesia, the world biggest producers which account for 80 percent of total supply.

But a new tariff pact Pakistan may sign with Indonesia by mid 2010 will divert some of the South Asian country's orders from Malaysia, Janmohammad said earlier this month.

He put Malaysia's share of palm oil imports to Pakistan at 95 percent. [nLDE6231G0]

Indonesian officials said in early February they hoped to sign a palm oil deal with Pakistan this year but did not give a time frame.

The Southeast Asian country has been pushing Pakistan for a cut in import duty on palm oil to the same level it charges on Malaysian products after a tariff agreement signed in 2007 between Islamabad and Kuala Lumpur.

Pakistan 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 Pakistan also bought a total of 525,000 tonnes of canola seed for January-April at between $450 and $470 a tonne from Australia and Canada.

"This is more than our requirement and that is the reason our local canola oil prices are under pressure. There will likely be a slowdown in purchases for the next quarter."