High imports of edible oil

Wheat exports and local prices Export potential of exotic birds Prospects of cotton exports High imports of edible oil The economics of unemployment Increasing farm productivity

Major reason to import bulk of edible oil is the low production of oil seeds in Pakistan

By FARAZ SIDDIQUI
Sep 11 - 17, 2000

Import of edible oil consumes a lavish proportion of our import bill of food items. Pakistan's total consumption of edible oil stands at 1.9 million tonnes in 1998-99 out of which only 0.6 million tonnes meets from local production but huge 1.3 million tonnes are imported from different countries like Malaysia and Indonesia.

In Pakistan, cotton, rapeseed, sunflower, soybean and safflower are major oil seed crops but oil seed crop still fall into the category of minor crops due to their seasonal nature. Oil seed is not grown at large and wherever it is grown it gives low yield per acre. Oil extraction from seeds is further poorer than its yield. Although during last fiscal year Pakistan's import bill has come down due to substantial decline in import prices of Soya oil and palm oil, but still consumes a big part of import bill. In 1999-2000 Pakistan's import of Soybean oil and Palm oil has drastically declined both in quantity and value. During the year 1999-2000 Pakistan imported soybean oil worth $75.8 million and palm oil worth $267.8 million.

Talking to PAGE, Iftikhar Ahmad Regional Manager(West and Central Asia), Malaysian Palm Oil Board said, major reason to import bulk of edible oil is the low production of oil seeds in Pakistan, low yield per acre and then under utilization of present capacity of extraction of oil from seeds. He also pointed out the fact, production of vegetable ghee and oil have been showing a consistent declining trend due to the poor technology state, under utilization of capacity, lack of value addition, off dated tool and techniques which forced to import oil and fats from abroad.

He further emphasized that in Pakistan we have different climatic conditions which are not as supportive for oil seeds as for other crops. So a comprehensive planning is needed to cultivate the crops at larger scale. Cost of locally produced edible oil is higher than locally produced, it seems irrational to produce locally when it proves uneconomical as compared to the import.

Iftikhar Ahmad further said that unavailability of basic infrastructure is the main detriment to harvest oil seed at large. For the local sufficiency first we need to develop basic infrastructure for the local production of oil seeds for instance in Malaysia and Indonesia thousands acres of land are under cultivation with all facilities available nearby which provides economies of scale. Scattered farming at small pieces of land does not provide economies of scale to the farmers as well as country, he added.

Being an importer, he denied that he would discourage the local production and self sufficiency of edible oil but first we should provide all the pre-requisites and then look forward. Talking about another aspect, he said, in Pakistan we are still using the backward technology for the extraction of oil. Iftikhar further said, our edible oil industries also lacks the value addition and modern techniques which are the main shield against the cut throat competition the world over. Through value addition we can extend market for our products and edging the competition in this regard, he added.

He admired the government stimulation towards sufficiency of edible oil, but he said that government policy seems confused as their practical moves do not follow their ambitious policies. So only way for the formulation of better policies and moves, experts concerning fields should be invited by the government and than formulate policy in this regard with their expert opinion and starting effors in right dimension..

Oficial estimates show that projected demand for the year 1999-2000 is also 1.9 million tonnes, the consumption level of edible oil is rising by 9 per cent which is expected to rise with every coming year. These days import prices of edible oil experiencing a declining trend but it is not a longrun phenomena because of ever changing nature of world market. So having our own base for edible oil can be a panacea to bring down the level of huge import bill of edible oil.

Having agricultural base is the competitive edge to produce edible oil locally but it demands comprehensive planning and research, high yield and proper utilization of resources to be a big producer of edible oil. Positive attitude by government has raised hopes in this concern being Pakistan a big producer of edible oil but all the steps should be focused for the development and enhancement of the infrastructure for oil seed crops and its extraction.

Modernizing the process of extraction of oil from seeds can increase the production of edible oil. Furthermore area under cultivation for oil seeds should also be expanded with high yield per acre which will increase the local production of vegetable oil. Increased production of edible oil can help in curtailing the import bill and create export opportunities if linked with the establishment of basic infrastructure and sound policies.