“Policy change needed to build stocks of edible oil” – Pakistan
ISLAMABAD: A major policy change is needed to build up local reserves / stocks of edible oil and motivate farmers to grow oilseeds in order to avoid the shortage of ghee and cooking oil in the country.
Talk to Business recorder, Abdul Waheed, former chairman of the Pakistan Vanaspati Manufacturers Association (PVMA) and former vice chairman of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said that the national oilseed crop consisting of sunflower, rapeseed and canola seeds reach just five percent of the total edible oil requirement in Pakistan.
Therefore, to bridge the gap between supply and demand, Pakistan imports edible oil and oilseeds to the tune of almost 3.0 million tonnes each. Due to the increase in the price of commodities in the international market, the import bill of these two commodities has reached US $ 4.5 billion in the current calendar year.
It takes an hour to cultivate import substitutes domestically, reducing the ever-growing import bill and further reducing the end-consumer price of basic food products – banaspati ghee and cooking oil, as well as meal. of soybeans consumed in the manufacture of animals and poultry fodder, being rich in protein.
He said from this perspective, it is important to note that in the first eight months, i.e. until August 2021, Pakistan imported 2.7 million tons of soybean oil seeds and canola to increase the local oilseed harvest by just 0.6 million. M Your produced in 2020-21.
Abdul Waheed said that during his tenure as president of PVMA, he insisted that the government pay attention and divert resources by increasing the area under oilseed crops, thereby reducing our dependence on oilseed crops. edible oil and imported oil seeds.
It was evident that once the Covid-19 pandemic subsides, demand will return, leading to an increase in the import bill and prices of finished products in global and domestic markets. Due to an extraordinary increase in demand, a disrupted supply / logistics chain and speculation coupled with its diversion to biofuels, we are seeing international prices hovering between US $ 1,350 and US $ 1,450 / M ton, he said.
This phenomenon is also expected to continue in 2022, as prices are expected to be between 1,200 and 1,300 USD / M tonne.
He suggested that it is high time for the government to simultaneously take short, medium and long term measures to control food inflation by building up local reserves / stocks of edible oil and motivating farmers to grow seeds. oilseeds.
The Prime Minister’s recently announced financial aid or targeted subsidy of 30% apparently may not be able to bolster market sentiment and tame the element of bridging the gap between l ‘Offer and demand.
“It is unfortunate to learn that the prices of ghee and cooking oil are between 350 and 450 rupees per kg and liter in an agricultural country. In addition, if urgent action is not taken, prices may rise further, following the same footprints as what we have seen in the case of sugar, as the scarcity factor and the growing gap between supply and supply. request is not dealt with in a timely and appropriate manner, ”Abdul Waheed warned.
He advised the government to involve the FPCCI, PVMA, APSEA, PEORA, PPA and other stakeholder associations in the formulation of a national industrial / trade policy on edible oil and oilseeds. , durable enough to offset the aftershocks of persistently rising international market prices and speculation and counter the element of shortages in the near future.
Copyright Business Recorder, 2021