Daily Times

KARACHI: The import of palm olien is likely to increase by 10 percent due to lower than expected international output, lesser yield of cottonseed in the country and surge in prices of all sorts of oils world over, millers and traders said on Wednesday.

Importers said Pakistan imported around 502,100 tonnes of edible oil from Malaysia in October, up by 6,333 tonnes as compared to import figures in the last month for same period. They said oil imports would further increase in December 2016 due to increased demand and stability in prices.

“The local market is up and would remain bullish so we can expect importers to cash on the situation and import a higher quantity in coming months,” said Raza Ibrahim, a trader and senior member of Pakistan Vegetable Manufacturers Association (PVMA). “We believe there will be an increase in import orders as we are expecting lesser yield of cottonseed this year, which is major source of edible oil production. Extraction of oil from 100 kilograms of cottonseed was around 40 kilograms.” Pakistan imports about 3 million tonnes of edible oil products every year, mostly Malaysian palm oil and olein to meet domestic demand of 2.81 million tonnes, as locally produced cottonseed meets the rest of the demand. Edible oil import cost around $810 million every year.

Ibrahim said local canola seed production had resulted in self-sufficiency in canola seed requirements of the country and now traders are not making fresh imports of canola seed. Local seed of synthetic type costs Rs 65/kilogram compared to international price varying from Rs 190/kilogram to Rs 270/kilogram. “Similarly, local hybrid seed of canola costs Rs 185/kilogram compared to Rs 500/kilogram to Rs 540 per kilogram,” he added.

Sarson crop is being cultivated on about 700,000 acres annually replacement of which would enhance canola acreage to about 1.0 million acres producing about 204,000 tonnes canola oil worth Rs 8.7 billion per annum, he concluded.

“Blending ratio of 35:65 for soft and hard oil has been introduced for improving quality of ghee and generating demand for soft oil,” said Zia ul Haq, a Karachi-based importer. “Solvent oil extraction industry was persuaded to purchase farmers’ produce at Rs 660 per 40 kilograms. As a result, sunflower area increased in Sindh and Punjab.”

He said cottonseed is the major supplier of the domestically produced oil followed by rapeseed and mustard (canola included) and sunflower cooking oil. However, he said share of canola was only seven percent in total indigenous edible oil production.