New import rules force India to divert palm oil cargoes to Pakistan

KUALA LUMPUR (August 27 2003) : Some Indian importers have diverted palm oil cargoes to neighbouring Pakistan to avoid confusion triggered by New Delhi's new rules on imports, industry sources said on Tuesday.

India, the world's largest edible oil consumer, said, this month imports of crude palm oil and crude olein must now have an acid value of two percent and a cartooned value of 500 to 2,500 milligrams per kg.

Cartooned are pigments found in plants. “Shipment bookings for Pakistan look good.

I don't see much demand for India because importers are not happy with the new regulations,” said one regional freight broker.

Freight brokers said Pakistan, which is also a main edible oil consumer, had so far booked 142,000 tonnes of palm oil from main producers Malaysia and Indonesia for August shipment.

Pakistan, which normally imports between 80,000 and 110,000 tonnes of palm oil each month, is also expected to buy 150,000 tonnes of soya oil in August.

Traders said palm oil cargoes were being held up at Indian ports because customs officials would have to make thorough checks to ensure importers comply with the new rules.

The slow process had frustrated some importers, who decided to divert their cargoes to Pakistan, which is stocking up ahead of the Ramazan fasting month starting late October, they said.

Traders also said cartooned content in Malaysian/Indonesian crude palm oil and crude olein was mostly below 500mg per kg, forcing importers to switch to refined products such as RBD palm olein, divert cargoes or stop buying oils.

India imposed the new rules because some importers had falsely labelled refined oil as crude to escape higher duties.

“We don't know how much oil has been diverted to Pakistan but it seems some Indian importers are already dumping their CPO,” said another freight broker.

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