Daily Times

The year 2021 saw Pakistan step into the limelight and has host World Environment Day (WED) under the banner of ‘Ecosystem Restoration’. According to the Global Climate Risk Index Report of 2020, Pakistan is the fifth most vulnerable country on this front; facing numerous climate change challenges which are embedded in its demographic and geographic make-up. The consequences of which are already evident in changing weather patterns that have resulted in rising temperatures, melting glaciers, off-season rainfall and hailstorms, and degradation of the ecosystem. In addition, there are other factors like depleting water reservoirs and an increase in water losses, which are contributing to changing crop patterns in the agricultural sector which trigger the threat of food security in the country.

Food security, as defined by the United Nations’ Committee on World Food Security, means that all people, at all times, have physical, social, and economic access to sufficient, safe, and nutritious food that meets their food preferences and dietary needs for an active and healthy life. Pakistan’s government is trying to balance the equation between the overall challenges of Climate Change, Food Security, and ever-increasing economic pressures due to the slow GDP growth rate, which was -0.4 percent for FY 2019-20 while per capita income decreased from USD $1,625 to $,1325. However, the projected GDP growth rate of 3.94 percent for FY 2020-21 is under hot discussion nowadays.

To multiply the aforementioned effects, the ever-increasing annual population growth rate of 2 percent has unfortunately also augmented poverty in Pakistan from 4.4 percent to 5.4 percent in FY 2019-20; and has, over time, spread beyond traditional strata. While the Covid-19 pandemic has also contributed to the decline of productivity, increase in unemployment, and decrease in the wages of the lower middle class, Pakistan now faces food security challenges and has to import major food items like wheat, sugar and edible oils, including significant quantities of palm oil. According to the Bureau of Statistics (BoS), the imports of food items during the first 10 months of 2020-21 have crossed $6.9 billion and one of the top commodities was edible oils including palm oil. Pakistan annually consumes 4.5m tonnes of edible oil worth more than $3.15 bn. It is the second-highest expense after the import of petroleum products.

Pakistan can only meet 20-30 percent of its edible oil demand from locally produced oilseeds while the deficit is met through imports, with palm oil/olein comprising the largest of 34 percent plus share in food imports

Edible oil is the key ingredient of Pakistani household food consumption, irrespective of which band the household falls; even the poorest of households derive some part of their nutrition from using any kind or brand of edible oil including palm oil. However, the consumer’s awareness regarding health benefits of different kind of oleins remains low.

Pakistan can only meet 20-30 percent of its edible oil demand from locally produced oilseeds, the deficit of 70-80 percent is met through imports, with palm oil/olein making the largest chunk of 34 percent plus share in food imports, estimated to be 3.3MMT in FY2020-21, ie up by 6 percent from the preceding year; making it the third largest importer of palm oil/oleins. The use of palm oil in Pakistan is mostly for food consumption either in the form of cooking oil or ghee (vanaspati) and both of these are used in the food industry for frying. Due to consistent increase in population, high oil consumption, and low/inconsistent domestic production of other oilseeds the import of palm oil will see steady growth as evident from yearly increasing rate of 4.5 percent over the last 7-years.

The increasing growing consumption/demand of edible oils needs to be looked at in more detail, particularly against the backdrop of divergent views and perceptions tagged to each one of the edible oils including palm oil. Nowadays the farming of palm oil is being done in a more modern, sustainable, and environment-friendly manner. Currently, the Indonesian and Malaysian sources from which Pakistan imports palm oil are regulated under Indonesian Sustainable Palm Oil (ISPO) & Malaysian Sustainable Palm Oil (MSPO) frameworks.

Thus, after analysing the demand, supply, and consumption patterns of palm oil, it is apparent that Pakistan for a long period will have to rely on the import of ISPO & MSPO certified Palm Oil from Indonesia & Malaysia. On the other hand, amid the harvest of fresh palm oil crops in both Indonesia and Malaysia the supply side has started recovering substantially and the international prices of palm oil and palm olein are decreasing steadily. Therefore, Pakistan should look into the possibilities of signing Preferential Trade Agreements (PTAs) with the countries of export, to reciprocally boost Pakistan exports against its food items import potential.

Pakistan has shown its commitment to the restoration of ecosystems in the country with the world’s most ambitious afforestation efforts by planting millions of trees and mangroves as well as creating an Ecosystem Restoration Fund. But the country is also required to adopt a realistic approach and a balanced outlook between climate change challenges and its local production of food items. Therefore, it is the call of the hour to develop a long-term sustainable ‘Food Security Plan’ with special focus on the import of edible oils. It is apparent from the current market scenario that a sustainable palm oil supply chain will always be the key element for food security of Pakistan at an affordable cost. In fact, as a major consuming country, Pakistan could also consider to share and discuss the existing concerns on promotion of sustainable palm oil certified, especially under the MSPO and ISPO certification frameworks, in the overall supply chain with the main producing countries like Indonesia and Malaysia for their support and suggestions.

Writer is a correspondent, Daily Times and tweets at @maferozi)