KUALA LUMPUR, Sept 17: Indian palm oil buyers tried to defer some shipments on Wednesday after a heavy sell-off in vegetable oil markets, while traders said Pakistan had yet to cover its needs for the fourth quarter.

Malaysian palm futures fell more than 15 per cent so far this week, spurring talk of defaults and deferments.

In the last round of steep price falls in August, India and China, cancelled or renegotiated around 800,000 tons of palm oil deals.

Some traders from India, the world’s second largest vegetable oil consumer, asked Malaysian and Indonesian suppliers for a deferment of 25,000 tons of crude palm oil meant for September delivery to October and November.

Small to medium firms are seeing a significant erosion in their margins and there have been quite a few negotiations, a leading trader in Mumbai told Reuters by telephone.

And prospects for defaults and deferments are high if palm oil prices, now trading less than half of record levels, fall further, said Ashok Sethia, president of the Solvent Extractors’ Association of India.

Retail demand for edible oils is low and will pick up in the next two months when purchases for festivals pick up.

The big importers are now planning to receive shipments in October and November, he said.

In India, domestic oilseed stocks are mostly drawn down at this time of the year and refiners depend on imports to stock up.

Malaysian crude palm oil futures tumbled 3.8 per cent on Wednesday as investors extending a sell-off on default and deferment fears, traders said.

PAKISTAN CAUTIOUS: Pakistan, the world’s fourth largest importer of vegetable oils, has yet to cover its palm oil needs for the October-December period due to recent global commodity market volatility, leading Pakistani traders said.

Buying has nearly stopped since palm oil seems to be falling by 100 ringgit almost every day, one trader, based in the port city of Karachi, told Reuters on Wednesday.

We are living a hand-to-mouth existence with the price volatilities and we haven’t even started covering for the October to December period.

In normal times, Pakistan usually secures most of its October palm oil shipments by mid-September, said a leading Malaysian trader, who deals with Pakistan and the Middle East.

It’s very plausible that Pakistan has not started buying, the trader said. In fact, the same applies to quite a few Middle Eastern countries.

Another trader said the South Asian nation was likely to buy 240,000 to 250,000 tons of palm oil as reserves would have fallen somewhat by the time the fasting period of Ramazan ended in late September.—Reuters