ISLAMABAD: The Commerce Ministry will constitute a committee to draft a comprehensive edible oil policy aimed at boosting the production and export of ghee and edible oils.
Commerce Minister Jam Kamal Khan shared this commitment during a meeting with Sheikh Umer Rehan, Chairman of the Pakistan Vanaspati Manufacturers Association (PVMA), and other industry leaders.
Well informed sources told Business Recorder that during the meeting it was discussed that production of CP10 from palm olein produces 50 percent olein and 50 percent stearin. Currently there is a restriction to sell stearin by ghee units officially to soapry and chemicals manufacturers. Legitimate sales of stearin are to be allowed to leading soapry and chemicals consumers like Sitara Chemicals for which amendment/ notification is required.
Jam holds virtual meeting with QCCI
Another issue, which came under discussion, was Export Facilitation Scheme (EFS) for the Ghee industry. Currently, EFS is allowed to edible oil manufacturers only by land route mostly to Afghanistan. This has been reduced due to import of CP10 from Malaysia. The Commerce Ministry has been requested to allow EFS facilities by sea particularly to Dubai, Gulf States and Saudi Arabia.
According to PVMA, the product has received considerable interest from Saudi Arabia, and is seeking EFS facilities for import of raw materials and exports by sea. During the meeting, Sheikh Umer Rehan underscored the urgent need for a comprehensive edible oil policy to address Pakistan’s heavy reliance on imports, which currently account for 90% of the country’s edible oil consumption.
“A robust policy is essential to boost local production and shield the economy from global market disruptions,” he emphasized.
He expressed concern over Indonesia’s new legislation mandating that 40% of palm oil be diverted to biodiesel production. He explained that this policy has disrupted global supplies, causing price hikes that significantly impact Pakistan, the third-largest importer of palm oil globally.
“The rising prices and reduced availability of palm oil from Indonesia pose severe risks to Pakistan’s food security and local industries,” he warned.
The chairman called on the government to leverage Pakistan’s status as a major importer to negotiate favorable terms with global suppliers. He also suggested a reduction in import duties and taxes on edible oil sourced from Malaysia and Indonesia to stabilize prices for local consumers.
The PVMA proposed expanding export opportunities for Pakistani edible oil products to markets in the Middle East and the United States through sea routes. Highlighting barriers in the existing Free Trade Agreements (FTA) and Preferential Trade Agreements (PTA) with Malaysia and Indonesia, Rehan called for a reduction of at least 50% in import duties on soybean and sunflower during Prime Minister Shehbaz Sharif’s upcoming visit to these countries.
Minister Jam Kamal Khan encouraged the PVMA to submit a detailed proposal within two to three days to address these issues and enable negotiations during the PM’s visit. He assured the industry of the government’s full support in resolving challenges and promoting growth. He also asked the association to include proposals for devising an edible oil policy to reduce Pakistan’s dependency on palm oil imports from Malaysia and Indonesia.
Sheikh Umer Rehan also proposed a pilot project to produce edible oil from rice husks, a byproduct often wasted in Pakistan despite its extensive rice production. He cited neighboring countries successfully utilizing this method and urged Pakistan to adopt similar initiatives to reduce dependency on imports and improve self-reliance.
Prominent attendees included Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Atif Ikram Sheikh, Senior Vice Chairman Asjad Arif, Vice Chairman Khalid Islam, Sheikh Amjad Rashid, and Sohail Malik.
Copyright Business Recorder, 2024
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