The Pakistani oilseed market, which started to grow sharply three years ago with the introduction of soybean crushing, continues on its path to becoming one of the fastest growing sectors in the region. As shown in Figure 1 below, the imports have grown quite sharply at the rates of 51.7% and 40.9% for 2016 and 2017, respectively. It is obvious from the graph that the trajectory of the total import line in red sharply resembles the soybean line in green, indicating the dominant role of the latter in the overall oilseed scenario. As soybeans are crushed largely to obtain vegetable protein, it is true that the main contributing factor in the growth of oilseed imports is the rapid demand for soybean meal by the poultry feed sector. On the edible oil side, the supply has been rather burdensome and liquidation of stocks has been rather slow despite the fact that the total edible oil available for consumption has also shown significant increase, as shown in Table 1 below:
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Table 1 - Total Edible Oil Availability, '000 MT
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Year Cotton Canola Sunflower Soybean Palm Oil1 P.Olein Total Palm Soft
Seed Oils Oils2
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2013 407 310 206 55 1,263 979 3,221 2,242 572
2014 450 483 151 124 1,222 1,094 3,524 2,316 758
2015 272 392 79 296 1,196 1,306 3,540 2,502 767
2016 272 499 72 360 1,141 1,257 3,600 2,398 930
2017F 299 525 35 554 1,189 1,635 4,236 2,823 1,114
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1 Includes Crude Palm Oil
2 Includes Canola, Soybean and Sunflower Oils
The table shows that the total edible oil, including all imported as well as oils extracted from local and imported oilseeds, available from 2014 through 2016 stayed in a rather narrow range of 3,524 to 3,600 KMT. However, in 2016, there's a steep increase of around 636 KMT (around 18% YoY). Of this, the increase in palm oils is around 425 KMT (~18%) whereas the increase in soft oils is around 184 KMT (~ 20%). The rapid growth in palm oil imports may be attributed to the increase in demand from non-traditional segments such as tea whiteners which have grown rapidly. Overall, the market has been able to add significant incremental demand, albeit there will be some slight YoY increase in the carry out stocks.
This puts Pakistan's per capita consumption of vegetable fat at around 20.3 kg which is in line with the estimated average of 18.0 kg for developing countries and world average of 19.5 kg for 2014-2016as per OECD-FAO Agricultural Outlook 2017-2026, and . This also indicates that the demand growth for edible oil might be nearing its plateau, especially for palm oils. However, we still might witness some demand switching from palm-based hydrogenated oils to oilseeds-based cooking oil for health reasons.The estimated share of palm-based hydrogenated oils (banaspati) versus cooking oil is estimated at 57% which is still high for the region and can be expected to be reduced further in the coming years. This additional soft oil demand will be necessary to make room for continued growth in oilseed crushing.
Let us now take a look at the soybean meal demand side to analyze future demand. A snapshot of the poultry industry is shown below:
The current estimate for poultry feed production is around 9 million MT. Table 3 shows the soybean meal availability for the last 5 years:
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Table 3 - Total Soybean Meal Availability, '000 MT
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Year Imports Local Total
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2013 278 - 278
2014 603 7 610
2015 754 435 1,189
2016 380 701 1,082
2017F 329 1,388 1,717
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This shows the total estimated soybean meal availability of 1,717 KMT for 2017 was close to the estimate demand of 1,800 KMT, assuming an average inclusion rate of 20% for soybean meal in poultry feed rations. This still leaves room for growth in soybeans to replace imported meal, increase in inclusion rates and growth in poultry meat demand as Pakistan's poultry meat consumption is still well below the estimated world poultry meat consumption of 13.8 kg as per OECD-FAO Agricultural Outlook (Edition 2017).
Based on the above, demand for canola seed for 2018 can be expected to hover close to the current level, whereas demand for soybean meal can be expected to grow at a healthy 15-20% range, assuming that locally produced soybean oil and meal will replace a significant part of their imported counterparts.
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Table 2 - A snapshot of the Pakistani Poultry Industry
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Total Poultry Statistics (2015 - 2016,
Economic Survey of Pakistan,
Pakistan Poultry Association)
* Registered Figures
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Hatcheries 400
Feed Mills 150 (Registered),
200 (Unregistered)
Feed Mills Production Capacity (Annually) 10 Million Tonnes
Parent Stock Production Capacity 12 Million
Total Meat 1170 (000 Tonnes)
Day Old Chicks 945 Million
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Domestic Poultry
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Rural Eggs Production 40.90 Million
Meat 115.24 (000 Tonnes)
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Commercial Poultry
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Commercial Eggs 12,077 Million
Day Old Chicks 912.99 Million
Layers 45.64 Million
Meat 1054.6 (000 Tonnes)
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