Pakistan Edible Oil Industry: Yesterday, Today and Tomorrow

The Edible Oil Industry is one of the oldest sectors in Pakistan, with origins tracing back to the Bengal Oil Mills established in Karachi’s Old City. This facility was reportedly inaugurated by Quaid-e-Azam Muhammad Ali Jinnah, Pakistan’s first Governor General.

Other notable early plants included Ganesh Oil Mills in Faisalabad and Unilever in Rahim Yar Khan.

After partition, Pakistan relied heavily on importing Edible oils and Vanaspati to meet its domestic needs, with local Ghee production accounting for just 30% of the demand. If my memory serves right, from 1955-1965, Pakistan imported Soybean Oil under the U.S. PL-480 Aid Program. While the aid provided the oil free of cost, Pakistan bore the expenses for transportation and related charges. This program formed the backbone of the edible oil supply during that period.

As Chairman of the Pakistan Vanaspati Manufacturers Association (PVMA) in 1958, I was privileged to lead Pakistan’s delegation to procure soybean oil under PL-480 Aid. My experiences with this initiative have been shared in previous articles.

In 1968, Palm Oil was introduced to Pakistan. As PVMA Chairman, I had the honor of negotiating the first purchase of 5,000 MT from Socfin through Marpro, a brokerage firm led by Mr. Sam Marshall, who remains active in the industry.

Despite tough competition and negative propaganda from the Soybean Oil lobby, palm oil gradually gained acceptance. When the PL-480 program was stopped, Pakistan turned to Palm Oil as a cost-effective alternative, marking a pivotal shift in its Edible Oil strategy.

Before the nationalization of the industry in 1971, the PVMA set a unique example of collective action by organizing joint oil purchases for all 26 Ghee production units in operation at the time. The PVMA managed the imports by opening L/Cs on behalf of all the units and distributing the oil according to their respective quotas. To control imports, the Ministry of Industries introduced a policy to allocate quotas based on each unit’s assessed production capacity.

This assessment, conducted in 1969, became a source of contention as many units challenged the capacity evaluations made by non-technical bureaucrats.

This phase marked a turning point for the industry. The Ghee Corporation of Pakistan was established, with its head office located in Lahore, to oversee the nationalized units. Although I was invited by the government to lead the corporation as its head, I declined the offer and recommended Mr. Habib urRehman, the then Chairman of Lever Brothers, who was known for producing DALDA. He took over the position but did not remain in the role for long.

Subsequently, the government appointed managing directors from the bureaucratic cadre, which further impacted the efficiency of operations.

Today, the most essential thing is to increase the export of Pakistan. Industry has not done more on this aspect. I feel the DTRE system shall be practical, and we should concentrate on exporting Vanaspati and Edible Oil. Many brands of Pakistan are well known in the Pakistani community in the UK, USA, Europe, and other places. Generally, however, Pakistan’s produce is not available in these markets.

Pakistan Edible Oil / Oilseed Industry is now one of the largest Industries. There is tremendous growth in our per capita consumption which is reflected in the table below:

From the above Table one can observe that demand for 250 million people is estimated to be around 4.50 million tons and the production of indigenous oil is very small thus the Country have to rely on the import of Edible Oils and Oilseeds to cater the total consumption which is indeed huge strain on the foreign exchange bill.

This reliance on imports places immense strain on Pakistan’s foreign exchange reserves. It is therefore imperative that the Palm Oil cultivation may be encouraged, rekindling hope for a cut in the import bills of edible oil after the crop’s commercial production. The Sindh government is planning to promote Palm Oil plantations to increase the local production of edible oil. To address this, the Sindh Coastal Development Authority (SCDA), in collaboration with Malaysian firms, is promoting Palm Oil cultivation along the coastal belt. This initiative aims to enhance local production, reduce environmental pollution, and lower the edible oil import bill.

Despite these efforts, Palm Oils cultivation in Pakistan faces numerous challenges. The yield remains low due to a lack of expertise in crop management and insufficient infrastructure, such as storage facilities and efficient transportation. Marketing also poses a significant challenge, as palm fruits are highly perishable and require careful handling to prevent deterioration. Overcoming these hurdles will require dedicated efforts and investment in training, technology, and infrastructure. Additionally, alternative crops like Sunflower and Rapeseed, which are better suited to Pakistan’s climate and soil, should be cultivated to diversify the industry’s production base.

Pakistan is now not only importing Edible Oil but Oilseeds as well. The Industry growth is enormous, and being an essential commodity, coordination between Import & Edible Oils & Oilseeds is imperative. We need to focus on developing more Brands & produce Qualitative Products.

My conclusion about self-sufficiency is not very bright unless the Industry changes its attitude on dependency on import as the Government of Pakistan cannot afford spending huge foreign exchange. Therefore, Industry should make more efforts and allocate funds jointly or separately for the development of growing seeds in Pakistan. I would further suggest that all Industries must create special departments in their units for growing more oil-seeds.

With over fifty years in this industry, I strongly believe that a collective effort is essential to reduce dependency on imports. By fostering local cultivation and adopting innovative practices, the industry can not only save valuable foreign exchange but also meet the growing demands of Pakistan’s population. Edible Oil Industry has now become a multibillion investment which is imperative for the industry to rise to the occasion and align with the government’s vision for self-reliance.

Edible Oil Scenario

Per Capita Consumption Around 18 kgs.

Total Consumption Around 4.50 Million Tons

Local Production Around 0.50 Million Tons

Import of Edible Oils Around 3.5 Million Tons

Import of Oilseeds Around 3.00 Million Tons

Oil Extracted from Imported Seeds Around 0.80 Million Tons

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