Tapping business opportunities: Pakistan a ‘key trading partner’ for Malaysia

Palm oil a major component of growing bilateral trade: Minister.

KARACHI: Malaysia, the world’s second largest palm oil producer, has named Pakistan as one of the key trading partners for its palm oil industry.

While addressing a press conference on the sidelines of the third Malaysia-Pakistan Palm Oil Trade Fair and Seminar, Datuk Amar Douglas Uggah Embas, Malaysian plantation industries and commodities minister, said Pakistan has always been the most consistent buyer of Malaysian palm oil products.

“Palm oil is a major component of the growing bilateral trade between the two countries,” he said.

Pakistan imported palm oil and palm oil products from Malaysia worth $1.3 billion in 2012, making it the fifth largest destination for their palm oil products, he said. Its volume remained 1.44 million tonnes in the same year.

“Pakistan is among the first export destinations in which Malaysia has (made) major investments in bulking installation and refineries, with the latest project being the liquid cargo jetty dedicated for the handling of palm oil.”

Almost 90% of the imported palm oil goes into Vanaspati and cooking/frying oil. The rest of the 10% consumption is in a variety of food products.

Primary uses of palm and palm kernel oil in Pakistan’s food sector include cooking oil, vanaspati, frying oils, margarine, shortening, pastry fats, bakery fats, dough fats, ice cream fats and milk fat substitute. Their sparing uses are in confectionary fats, food ingredients, soup mixes and candies and toffees.

Embas also urged Malaysian companies to collaborate with local Pakistani companies in developing other areas in the oils and fats trade, including oleo chemicals, biomass utilisation and animal feed. “Such efforts will spur growth in the Pakistani oils and fats industry and enhance trade between the two countries.”

Malaysia is the world’s second largest producer and exporter of palm oil, as its production in 2013 was 19.21 million tons. Its export earnings in 2013 were $19.4 billion. The largest producer and exporter of palm oil is Indonesia, which produced 28.5 million tons of palm oil in 2012 and exported a total of 19 million tons in the same year.

According to the World Trade Organization, annual growth rate in the import of Malaysian palm oil and its fractions (excluding crude palm oil) to Pakistan remained 5% between 2008 and 2012. However, annual growth in the overall import of the same products in 2008-2012 was 15%. Pakistan’s total imports of palm oil and its fractions, excluding crude palm oil, were $1.7 billion in 2012.

Published in The Express Tribune, January 17^th, 2014.

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