Pakistan: Palm and Soybean-Related Imports Hit $4 Billion
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Pakistan’s Palm and Soybean-related imports stood at US$ 4 billion in FY21, rising by 47 percent year-on-year, compared to a compound average growth of 12.3 percent in the last 20 years. While, in part, this increase stems from rising international commodity prices, the rise in Palm and Soybean imports is not a new phenomenon. The combined imports of Palm and Soybean have been growing noticeably over the last twenty years, rising to 7.1 percent of total imports in FY21 from 3.2 percent in FY01. Currently, Palm and Soybean products are among the top 10 commodities (at an 8-digit HS Code level) imported by the country. According to AgFlow data, Pakistan imported 145,214 tons of Palm Oil from Indonesia in Jan-Apr 2023.
Several demand and supply factors are driving the imports of Palm and Soybean, which constitute the bulk of Pakistan’s total imports of Oilseeds and their products in both value and volume terms. Regarding value, Palm and Soybean products constitute 90 percent of total edible Oil and Oilseeds imports. In quantity terms, total imports of Oilseeds and its products surpassed 7 million metric tons in FY21, 87 percent of which comprised Palm and Soybean. The remaining 13 percent comprised rapeseed, sunflower, groundnut, copra, and other Oilseeds and related products.
On the one end, the demand for edible Oil and Oilseed products has been rising due to the increasing population, growing income levels, and the gradual modernization of the livestock industry, particularly poultry. On the other end, local Oilseed production has been unable to keep pace with the increasing domestic demand for edible Oil and Oilseed products (including meals for animal feed). During the last 15 years, the local production of edible Oil has registered negative average annual growth of 1.2 percent, while the demand per capita has increased by 2.3 percent, three leading to increasing reliance on imports for both edible Oil and meals.
However, Pakistan’s growing reliance on Palm and Soybean is not out of sync with global consumption patterns of edible Oil and meal, which is also dominated by Palm Oil and Soybean Oil in the edible Oil category, and Soybean in the meal category. Even among countries that are the most significant producers of rapeseed/canola and sunflower – the third and fourth most consumed vegetable Oils in the world – Palm, and Soybean Oil have noticeable shares in their respective edible Oil consumption. This is true even among countries that have low edible Oil consumption and are among the biggest producers of rapeseed and sunflower.
Pakistan’s Palm and Soybean Planting Potential
Contrary to global trends, there has been little focus on Palm and Soybean in Pakistan. Various five years plans since 1955 have highlighted and proposed the need to focus on Soybean and other Oilseeds. However, a lack of consistent policy has prevented Oilseed crops, mainly Soybean, from taking off. On the other hand, while initial surveys and pilots on Palm began in the mid-90s, Palm started featuring in policy documents only after 2005. However, so far, policy efforts with a long-term focus have not been undertaken for Oil Palm plantations. These trends pose the question of whether or not Pakistan can grow Palm and Soybean in the country.
To draw on the work of local agricultural research institutes, Oil Palm plantation does not seem to have potential in Pakistan in the short to medium term of 5-10 years, whereas Soybean can be produced at a large scale in the medium term if policy support is provided. Although Pakistan’s share in global Oilseed consumption is a marginal 1.1 percent, it follows the same growth trend, with domestic consumption up 3.5 times over 1981. The increase is driven by increased demand for edible Oils and Oilseed meals.
Other sources: SBP
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