Rising production of edible oil

Published on 21st Mar, Edition 12, 2016

 

Pakistan edible oil industry has diversified not only as ghee/cooking oil manufacturers but additionally as refiners and seed crushers. The major oilseed crops grown in Pakistan include canola, sunflower, rapeseed/mustard and cotton. Pakistan also grows sesame and groundnuts but their production is very limited as the cost is too high to yield competitively-priced oils.

IMPORTS PAYMENTS BY SOYABEAN & PALM OIL (Thousand US $)
DETAIL	JUL-15	AUG-15	SEP-15	OCT-15	NOV-15 (R)	DEC-15 (R)	JAN-16 (P)
Soyabean Oil	8,710	1,379	14,498	29,663	18,434	15,930	18,620
Palm Oil	153,624	153,229	141,478	139,106	119,548	111,759	111,689
EXPORT RECEIPTS BY OIL SEEDS, NUTS AND KERNALS (Thousand US $)
DETAIL	JUL-15 (P)	AUG-15 (P)	SEP-15 (P)	OCT-15 (P)	NOV-15 (P)	DEC-15( R)	JAN-16 (P)
Oil Seeds, Nuts and Kernals	733	382	1,307	1,950	2,276	2,235	1,566

The growers are cultivated traditionally which include rapeseed, mustard, sesame, cottonseed and groundnut. It is said that sunflower, soybean and safflower are more non-conventional introduced in the 60s in the backdrop of the Green Revolution. It is a sad reflection of the previous strategies that Pakistan has failed to generate edible oil in adequate quantity over the eras to meet its local requirements. All attempts made so far to increase domestic production have been unsuccessful and the gap between consumption and production continues to widen.

It is predicted that the country has a yearly consumption of edible oil at 4.0 million tons with an average growth at about 4.0 percent.

Palm accounts for 65 percent share in total edible oil consumption. The present palm stocks in Pakistan are about 260,000 tons. As such, Pakistan is a net importer of oilseeds and edible oils, as local production can hardly meet 25 percent of total demand.

The domestic oilseed output comprises of sunflower seed, cottonseed and rapeseed. Cottonseed is also the main supplier of the locally produced oil, while rapeseed, mustard (canola included) and sunflower play a minor role. Although the government is laying more emphasis on the use of soybean as oilseed along with edible oil.

Government is also planning to introduce an action plan for rising production of canola oilseed. It is proposed that canola should at least meet one-third of the oil seed needs, but the issue is that its area under cultivation is constantly in fall because of growers’ shift to wheat crop due to government’s better wheat support price.

During FY2013-14 in Pakistan, total availability of edible oil was recorded 3.20 million tons. Domestic production of edible oil contributed 0.573 million tons while import of edible oil/oilseeds was recorded 2.627 million tons. The edible oil import bill in FY2013-14 was Rs246.895 billion (US$2.50 billion). During FY2014-15 (July-March), 1.789 million tons edible oil of value Rs139.344 (US$1.377 billion) has been imported showing a rise of 4.07 percent against the corresponding period (July-March) FY2013-14.

Domestic production of edible oil in (July-March) FY2014-15 was estimated at 0.546 million tons. Total availability of edible oil from all sources is provisionally estimated at 2.335 million tons during (July-March) FY2014-15.

Because of slump in foreign market of edible oil and oilseeds, the local traders were offering Rs2,050/- to Rs2,100/- per 40 kg for canola crop produce during FY2014-15.

Low prices in domestic market discouraged the oilseeds farmers resulting fall in edible oil production. Previous year average price of oilseeds (canola/sunflower) prevailed almost Rs2,500 to Rs2,800 per 40 kg.