Govt mulling asking CCP to take action against vanaspati makers?

ISLAMABAD: The government is likely to direct the Competition Commission of Pakistan (CCP) to take action against vanaspati manufactures on suspension of collusive behaviour as the industry has not passed on the reduction in prices of commodity to the consumers, sources in Commerce Ministry told Business Recorder.

On March 13, 2025, during discussion on presentation on status of availability and price fluctuation of vegetable ghee/ cooking oil, the Economic Coordination Committee (ECC) of the Cabinet directed that the Ministry of Industries and Production to present the status of availability and prices variation of the commodity in the next meeting of the ECC, given the rising price trend of vegetable oil.

In this regard, the MoI&P held two meetings with Pakistan Vanaspati Manufacturers Association (PVMA) in April and May 2025 for deliberations.

‘Anti-competitive practices’; CAT upholds Rs50mn fine on Vanaspati Manufacturers Association

The data available with Pakistan Bureau of Statistics (PBS), Federal Board of Revenue (FBR) and Ministry of National Food Security and Research was also consulted.

According to sources, it was observed that since early December, 2024, there had been a 24% decline in the international price of palm oil, whereas the price of cooking oil in the local market is still higher by 4.5% compared to the peak in international prices.

An overview of Pakistan’s Ghee sector suggested that import and marketing of edible oil and ghee is not regulated. PVMA is a registered association with 148 members and 450 licenced brands of ghee and oil.

Market share of imported oil and oil seeds is 89% (3.842 Million MT) while locally produced-oil seeds have a share of 11% i.e., (0.474 Million MT) only. Total requirement of edible oil in Pakistan is around 4.2 to 4.3 million MT. Pakistan is the third largest importer of oil and oil seeds in the world and imported around 88% of palm oil/olein from Indonesia and around 11%imports from Malaysia. Furthermore, soft oils i.e., Soybean, Sunflower, Canola are imported from Argentina, Brazil, United States, Ukraine etc.

PVMA maintained that current stocks of around 375,000 MT of palm oil and olein are available at ports, which are sufficient for one month. Furthermore, ships are arriving on regular basis. Regarding price, the PVMA revealed that it was a wrong perception that local edible oil or ghee market is closed and monopolistic as more than 148 manufacturers are registered with PVMA.

Consequently, due to intense competition, it is not possible for a seller to sell at a higher price. The prices will further fall when the cheaper Palm oil/olein reaches ports within around two and half months. Moreover, due to new trade policy introduced by US, there is a recession in palm oil and olein market.

The sources said that ample stocks are available in the country. However, the impact of international prices is generally transferred to local market after two months when the imported raw materials reach Pakistan. The impact of decreasing international prices in the month of December, 2024, was not transferred to general public despite lapse of more than two months.

“The Competition Commission of Pakistan should take necessary action to ensure no cartelisation in oil and ghee sector and provincial governments should vigilantly monitor the prices of different tier brands,” the sources continued.

Copyright Business Recorder, 2025