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Sector Briefs: History
Sector Briefs: History
Sector Briefs: History
Sector Briefs
History:
The edible oil imports stood at $2.43 billion out of the total import volume of $4.49
billion in 2011-12. Growth in population and in the fast food business led to the increasing
intake of oily food items and higher industrial demand for crude palm oil, thus leading to a
boost in import volume. A surge in international prices was also responsible for a big jump in
the import bill.
Pakistan imports around 8% of its total edible oil imports from Indonesia. After linking of
the imports with the composite rates of dollar, the unabated increase in edible oil prices has
already hit the masses severely as the price of palm oil in local markets.
Vegetable ghee and cooking oil industry is one of the largest manufacturing sectors in
the country and has grown since the country’s independence in 1947. The production was 835
thousand tonnes in 2000-01, reached 1,180 thousand tonnes in 2006-07 and fell to 1,070
thousand tonnes in 2011-12.
This industry was nationalized in 1972; however, since 1988, the private sector has been
allowed to run this industry. At present, the industry has 160 small and medium sized vegetable
oil and ghee units that are contributing a huge amount to the national exchequer, in the form
of duties and taxes.
Out of the total units, about 87 firms are members of PVMA, and have produced
products of about 1.07 milliontonnes during 2011-12. There are a large number of unregistered
firms who are filling the gap between demand and supply. Annual consumption of edible oil has
reached 2.3 million tonnes, of which 20% of the supply is from domestic sources and the
remaining quantity is imported. The import during the year 2009-10 of edible oil (Soybean &
Palm Oil) was $1,979 million that rose to $2,426 million in 2011-12, showing an average
increase of 7% per annum. Imports are made under Malaysian Palm Oil Concessionary Trade
Agreement (MPOCTA), like Free Trade Agreement (FTA).
Types of Oils:
Palm oil
Cotton seeds oil
Rapeseed and Mustard oil
Soybean oil
Sunflower seeds oil
Canola oil
Raw materials:
The country has two main sources of edible oils, cotton seed, which is a by-product of the
cotton ginning industry, and rapeseed or mustard seed which is traditionally grown on rainfed
marginal lands. The country also grows sesame and groundnuts but their production is very
limited and the cost is too high to yield competitively-priced oils.
Vegetable oils sold on the grocery store shelf are “RBD” oils, meaning they have been
B – Bleached: removes colorants and other compounds that are blamed for rapid
oxidation and reduced shelf life
Afifa 15280920-018
Submitted to:
Mam Rameeza Ijaz