Speakers call for producing local palm oil

Speakers at a moot urged the government to grow palm oil trees to produce palm oil locally, meet domestic demand, and reduce over 90% dependency on Indonesia and Malaysia. They stressed the need for immediate action as both Indonesia and Malaysia are increasingly consuming palm oil for biodiesel, raising concerns about an acute shortage in the coming years.

They expressed these views during the two-day event titled the "7th Pakistan Edible Oil Conference (PEOC) 2025," held at a local hotel on Saturday. Speakers highlighted that Indonesia stopped palm oil exports worldwide a few years ago, causing a severe shortage in Pakistan. "Indigenous production is the only sustainable solution to this recurring issue. The government must seriously focus on local palm oil plantations without delay," said experts. Federal Minister for Industries, Production Division, and National Food Security and Research, Rana Tanveer Hussain, also underscored the importance of producing edible oil indigenously, noting that Pakistan imports 3 million metric tonnes of edible oil annually. He said that edible oil imports constitute the second-largest import bill of the country after petroleum products.

"Unfortunately, indigenous production is very low, resulting in a 90% dependency on edible oil imports. The edible oil industry must take the lead in boosting local production," he said. Westbury Group Chief Executive Officer (CEO) and Pakistan Edible Oil Refiners Association (PEORA) Chairman, Abdul Rasheed JanMohammad said that Pakistan overbought palm oil/palm olein for December shipments, and the arrival figures would become evident in January. He noted that the country had also secured soybean oil supplies from December 2024 to March 2025 due to its lower prices compared to palm oil.

"Crude oil remains a political commodity, with prices fluctuating based on geopolitical factors. Malaysian palm oil stocks in December 2024 stood at 1.708 million tonnes, but production is expected to decline between November and March, potentially reducing stocks further," he said. He explained that the prices of sunflower and rapeseed oils, which were previously lower than soybean oil, have now surpassed it due to crop conditions. "Pakistan would have imported more soybean oil if local import tariffs were more competitive with palm oil," he added.

JanMohammad also noted that the PEOC was being held at an opportune time as markets face significant uncertainty. "Current fundamentals do not fully justify the price surges, but stronger funds are currently driving the market amid scepticism about Indonesian production," he observed.

Pakistan Vanaspati Manufacturers Association (PVMA) Chairman, Shaikh Umer Rehan, reiterated the need to enhance edible oil production urgently. He pointed out that the coastal belts of Sindh and Balochistan are highly suitable for producing sunflower oil.

"We import edible oil worth around $4.50 billion annually, including over 3 million metric tonnes of palm oil from Indonesia and Malaysia. Around 1 million metric tonnes of palm oil have been produced locally in Sindh and Punjab over the past two decades. We must work harder to boost this figure," Rehan stated. He urged the government to offer attractive incentives and subsidies to private investors for growing palm oil locally. Dispelling misjudgement about low growth of palm oil in Pakistan, he said the country holds huge potential if there is a strong will. "This industry is the second largest revenue generation sector of Pakistan," he said, calling for local production of edible oil. Rehan warned that Indonesia and Malaysia's growing use of palm oil for biodiesel could leave Pakistan unable to import from these two major producers in the coming years. "Given this pressing concern, the government must address this issue on a war footing to prevent an imminent shortage of palm oil," he said.