Time to oil your own palms

Whether its nihari, biyani or even plain boiled rice, the common denominator of all Pakistani food is cooking oil. And health indicators in the country reflect the fact, with growing numbers of cholesterol related ailments.
Pakistan is one of the leading importers in the international market for palm oil products. Nearly 75 percent of the refined palm oil is imported, mainly from Malaysia. Locally, cotton seed, soya bean and sunflower seed provide raw material.
Some media reports have quoted crude palm oil prices to be hovering near $720 per metric ton, a six-month low. But since Pakistan imports refined palm oil due to limited refining capacity, the actual cost including freight and handling, adds up to $800 per metric ton.
Still, there is hope for consumers as "price is expected to break to about Rs110 from the current Rs125 per litre of cooking oil in the coming months" according to Khwaja Asif, chairman Pakistani Vanaspati Manufacturers Association (PVMA), whose industry consumes a significant portion of total palm oil imports.
And tallying prices from Karachi Grocers Association reveals that prices in the local market do change with international variations, at least when it comes to edible oil. "There is no question of price manipulation in local market, as there are more than 200 importers" said Haji Mohammed Akhtar, former chairman PVMA.
But while there may no price manipulation in local market, stakeholders fear that skewed trade policy may keep prices inflated for domestic consumer.
Government of Pakistan has awarded a 15 percent exemption on customs duty to palm oil imports from Malaysia. PVMA officials claim that Malaysian exporters have a monopoly like situation, "prices are higher in Malaysia but the duty exemption makes them most competitive for Pakistani importers" Asif told BR Research.
PVMA has sent written requests to the relevant ministry in Islamabad, to afford the same trade incentive to Indonesia, which is the largest exporter of palm oil, surpassing Malaysia in 2006. Such a measure would increase price competition and bring down the price of edible oil for the end consumer in Pakistan.
Keeping in mind the growing population and the burgeoning demand for edible oil, the government set up Pakistan Oilseed Development Board (PODB) in 1995. Its purpose was to enhance yields with the eventual aim of reaching self sufficiency.
"For almost fifteen years now, we have been paying Rs50 per ton in R&D to PODB, but there is nothing to show for it" said an importer of palm oil from Peshawar. Rough calculations reveal that Rs1.2 billion has been spent on R&D since FY93 and yields have remained stagnant when averaged over the past five years.
Consuming edible oil worth $100 million every month for a country that can barely afford to feed its population makes one wonder if the authorities are thinking about really developing capacities to meet the cooking needs of the country.