Pakistan can save $1.2bn by promoting local edible oil


Pakistan can save over $1.2 billion annually by encouraging the domestic edible oil sector, experts on extraction of edible oils opined.

Over 2.6 million tonnes of edible oil imports cost more than $3.1 billion annually making it the second largest import after petroleum products, which compromises the balance of payments capacity, they asserted.

The international price of refined, bleached, deodorised (RBD) reached $690 per metric tonne while the price of palm oil touched around $560 per metric tonne.

The Malaysian palm oil products export also witnessed an increase around 3 percent during 2017 to 799,600 metric tonnnes.

Pakistan imports crude and refined cooking oils (palm and palm olein) mainly from Malaysia and Indonesia and brings in soybean oil from North America and Brazil.

Shakeel Ahmad of Sindh Agriculture Forum was of the view that proper farming, production, processing and marketing of oilseeds can not only reduce dependence on imports but also help earn foreign exchange as Pakistan is located in the food deficient region.

The reasons behind the wide gap between production and consumption include lack of research and development initiatives, want of incentives, failure to attract investment, low price and high cost of production making these crops non-profitable to many farmers.

Pakistan has become the third largest importer of cooking oil after China and India. Besides Pakistan also imports over 2.2 million tonnes oil seeds every year, he said.

Imports help the country meet around 70 percent of its domestic needs. The remaining need is met through locally produced banola and mustard oils.

Ghulam Rabbani an oil extractor from cotton seeds was of the view that per capita consumption of edible oil in Pakistan is declining due to increasing poverty, presently it is at 15-16 kilogrammes and promoting cultivation of oilseeds would also be a great remedial measure to help the masses reeling under poverty.

Agriculture is the single largest sector of our economy, which accounts for 23 percent of gross domestic product and employs half of the labour force but faces problems like low productivity and limited investment.

Focus on commercial farming of oilseeds, especially soya bean at a high percentage of oil (23 percent) as compared to other varieties and high protein content (43 percent) can help the country.

Cottonseed with 3.93 million tonnes annual production has only 16 percent of oil. Sunflower has the highest oil percentage at 48 percent.

India, the largest importer acquires nearly 50 percent of its demand from abroad while Islamabad buys around 70 percent of oil from international market.

Pakistan Vanaspati Manufacturers Association is ready to assist Pakistan with area specific technologies to become self-sufficient in edible oils in the first phase and then start exporting to world markets.

The increase of palm oil products in the international market the local edible oil and ghee manufacturers increased prices of their products.

The Pakistan Vegetable Oil Mills Association, Pakistan Edible Oil Refines Association and owners of various branded ghee and oil mills said due to rise in international price, they have just made adjustments in the price.

Approximately 32 percent of the import bill is comprised of taxes that importers pay at Pakistan's sea ports. The government should rationalise the taxes. Import Tax Price duty should be increased or decreased in proportion to the changes in the price of imported edible oils in the international market.

Imports are made under Malaysian Palm Oil Concessionary Trade Agreement like free-trade agreement.


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