PEOC has provided an opportunity to the participants to listen to and be enlightened with the views of world-renowned Speakers who are experts in various fields of Edible Oils and for getting guidance for the future from their opinions and forecasts, as well. I have been associated with Ghee and Vanaspati Industry since 1965. As the Chairman of Pakistan Vanaspati Manufacturers Association (PVMA) I represented the Industry and the Government in various Conferences and in Edible Oil Deals abroad.Being Chairman of PVMA, I had to play the role to strike a delicate balance between all Industries and also to communicate with the Government, pleading for the interest of Vanaspati manufacturers.
I have an overall long experience of over 55 years in almost all the fields of Edible Oil, whether Commercial or industrial, besides exposure to international markets and business relationship with world renowned suppliers/trading houses. My views on indigenous oilseed production and current scenario of Edible Oil Industry in Pakistan, are as follows:-
The major oilseed crops in Pakistan include Sunflower, Canola, Rapeseed/Mustard and Cotton Seed. Total availability of Edible Oils during the year 2015-16 remained at 3.726 Million tons, of which local oil production contributed only 14 percent or 0.462 Million tons (462,000 M.Tons) and the vast gap was met out from imports. The import share of edible oils/oilseeds was 3.264 Million M.Tons or 86%, involving import bill of about US$ 2.710 Billion.
In case of Cotton Seed, there was about 14% drop, due to factors of sharp decline in sowing area and as a result of exceptional losses to farmers from pest infestation and lower domestic prices at sowing time compared to other competitive crops (Sugar Cane and Maize). Rapeseed and Mustard witnessed decrease in production by posting negative growth of 3.2% over the year, due to decrease in area sown.
The import of Edible Oils per annum (Calendar year 2017) has risen to around 3.0 Million tons while the import of Oilseeds is around 3.0 Million tons as well per annum. With growing population, edible oil consumption is expected to rise by 3 to 5% on yearly basis making it an even more attractive market for foreign suppliers and local entrepreneurs.
It is imperative that our various Associations should also concentrate on the Research and Development (R&D) of local oil and oil seeds as Pakistan dependency on the imported Oils and Oilseeds is enormous. Our Government's priority is mostly on Cotton, Wheat, Rice and Sugarcane crops but unfortunately there is no significant effort to increase the local Oilseed production. It is important that we make the Government realize that Edible Oil Industry is one of the highest tax paying Industries in the country, paying on the whole over Rs 100 Billion in taxes, directly and indirectly and deserve equal focus and commitment and its contribution needs to be recognized by the Government and their problems solved on fast track basis.
At present, there are more than 150 Ghee/Cooking Oil Manufacturing Units in the country. The problems being faced by Edible Oil Industry and my suggestions to address those problems are discussed below:-
--i). High rates of Government duties and taxes on Edible Oil Industry. Custom Duties and Taxes at import stage are much higher than the levies in neighboring countries. There is need for the Government to consider reduction in the Duties and Taxes on this essential food item and encourage Vanaspati/Cooking Oil manufacturers to invest in Oilseed crops in Pakistan as well, so as to achieve self-sufficiency in Edible Oil in coming decades, which would also result in saving in heavy foreign exchange expenditure, being incurred on imports of Edible Oils.
--ii). Imposition of Export Duty on Crude Palm Oil (CPO) by the Government of Malaysia / Indonesia, due to which, the Refineries in Pakistan are not getting their raw material viz. CPO at workable and affordable price and as a result many Palm Oil Refineries are forced to stop their operation.
iii). Hindrance recently caused by Punjab Food Authority and discouraging use of Vanaspati Ghee. In this connection, it is pointed out that Vanaspati Ghee is not harmful to human health, as being misconstrued by some quarters. Quality Vanaspati Ghee is produced by taking all the precautions/measures at different manufacturing processes by leading Vanaspati Units in the country by meeting all international standards and the Product is not harmful for health and fit for human consumption, contrary to misconceptions in this respect.
--iv). Higher cost of transportation of Edible Oils from Port Qasim Terminals to Industrial units throughout Pakistan. Because of rapidly increasing cost of Petroleum Products/Fuel, the transportation cost of Edible Oil is gradually increasing, due to which, Ghee Industry is badly suffering. The solution lies in transporting Edible Oil in bulk through railways, as was the case until about year 1995 (till nationalization period of Ghee Industry). Many Ghee Units in Punjab and KPK have railway sidings and decanting facilities, besides almost all Ghee Mills are near railway stations. The availability of railway wagons for Edible Oil transportation will reduce the transportation cost as well as help in removing congestion at national highway/cities. Government may consider to restore the movement of Edible Oils through Railways on priority basis.
--v). I would again emphasis that Edible Oil Industry in Pakistan should try to develop and encourage Oilseed cultivation in Pakistan. I would suggest that each industrial unit should establish Research and Development (R&D) department for this purpose and allocate part of their profit for cultivation of Oilseeds (Sunflower seeds, Rapeseed & Mustard, as well as Olives) in the country. The industry must take it seriously in order to minimize dependence on import of Edible Oils which is heavy burden on national exchequer, because Pakistan's imports are more than double its exports.
The Author is Chancellor of Institute of Business Management (IoBM), Chairman, Pakistan Malaysia Business Council of FPCCI, Chairman, Westbury Group of Companies, Chairman, Dalda Foods Limited and other companies.