Pakistan's Biggest Food Import: Cooking Oil Worth $4.5 Billion Worsens Trade Deficit

Rising demand and soaring prices of cooking oil raised Pakistan's edible oil import bill to $4.5 billion in fiscal year 2021-22, according to government sources. Pakistan is the world's third largest importer of palm oil after India and China. Total cooking oil imports add up to 3.7 million tons while the total annual edible oil consumption is about 5 million tons. Pakistan's palm oil imports are the second biggest commodity import after more than $20 billion in energy imports, accounting for a significant chunk of Pakistan's growing trade and current account deficits.  

Sources of Palm Oil Imports in Pakistan. Source: Dawn


Pakistan Palm Oil Consumption Growth. Source: NationMaster


Pakistan's edible oil consumption has been rising over the years. It is now about 24 Kg per person which is among the highest in the world, according to analysts quoted by Dawn newspaper.  Combined with rising prices, the total imports of palm oil could exceed $6 billion next year. It could further worsen the country's balance of payments problems. Is Pakistan doing anything to try to grow oil palms in the country? Researchers at the Institute of Business Administration (IBA) in Karachi have studied it and reported the following: 

"Based on our research, visits and interviews it was determined that in Pakistan there are ample opportunities and favorable conditions for growing oil-palm trees. Report findings suggest that the coastal belt of Sindh has proven capability of growing oil-palm trees with a per acre yield comparable to that in major oil palm growing countries due to plenty of fertile land, irrigation water courses, supply of fertilizers, and skilled farmers available in this part of land".  

Pakistan Food Imports. Source: TDAP


Sindh Coastal Development Authority (CDA) has recently announced plans to plant 60,000 oil palm trees on an area of 1,000 acres in the current fiscal year.  An earlier project in 2020 showed that the oil content of palm fruit from Sindh's plantation in Thatta is 2% higher than the world average. 

Per Capita Wheat Consumption in Pakistan vs World. Source: Abdul Mottaleb et al


Per Capita Edible Oil Consumption in Pakistan. Source: Pakistan Growth Story


Southern Indian state of Telangana has launched a much more ambitious project to plant palm oil trees on 2 million acres of land in the next four years.  To achieve this goal, the state has plans to build large dams and irrigation canals and import millions of germinated sprouts.

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Riaz Haq said…
Pakistan’s total oilseed use to hold steady in 2022-23 | World Grain

https://www.world-grain.com/articles/16662-pakistans-total-oilseed-use-to-hold-steady-in-2022-23

Imports of soybean, canola and palm oil are expected to hold steady at 3.4 million tonnes. No growth is expected in edible oil imports for 2022-23 and are forecast at 3.7 million tonnes(accounting for 70% of total cooking oil consumption in Pakistan). Soybean and rapeseed imports for 2022-23 are forecast to remain on par with the previous year at 2.6 million and 0.8 million tonnes, respectively. While facing significant price pressure and potential for disruption in supplies from key exporters, palm oil is forecast to remain the major imported oil, with imports forecast at 3.6 million tonnes.
Riaz Haq said…
The government has planned to increase the annual edible oil production up to 4.79 million tons over the next 10 years in an effort to take the country towards self-sufficiency in food commodities, especially in edible oil.


https://tribune.com.pk/story/2364258/govt-plans-to-raise-edible-oil-production-to-48m-tons

Minister for Planning and Development Ahsan Iqbal presided over a meeting on Friday to review the measures being undertaken to achieve self-sufficiency in edible oil.


It was informed that Pakistan imported 4.5 million tons of edible oil annually to meet its demand. At present, the country produces just 0.745 million tons of edible oil annually, which is only 8% of the total demand of over 5 million tons.

The move would help minimise the huge import bill of the food group that was recorded at $7.57 billion in the first 11 months (Jul-May) of fiscal year 2021-22.

The import of palm oil was recorded at $3.06 billion while that of soybean oil stood at $217.7 million during the period under review.

The meeting reviewed the measures being taken for palm oil sufficiency and planned that the production would be gradually increased from the current 0.745 million tons to 1.192 million tons in five years and to 4.793 million tons in the next 10 years.

Ahsan Iqbal directed that the plan to take the country towards self-reliance in edible oil should be discussed with all provincial stakeholders and a feasible roadmap should be finalised within a week after taking all of them onboard.

The minister said investors in the edible oil sector should be given special incentives to boost local production.

He said making the country self-sufficient in edible oil was the top priority of the government’s development agenda and directed to engage the private sector to expedite the process.
Riaz Haq said…
Inflation measured by the Sensitive Price Index (SPI) increased by 0.82 per cent from the previous week, mainly due to a slight increase in perishable food products, according to the Pakistan Bureau of Statistics (PBS) data released on Friday.

https://www.dawn.com/news/1703489/weekly-inflation-continues-to-rise

Last week, a 3.68pc increase was noted in the SPI, which was the highest since the change of the base year for measuring the SPI. On June 17, the second highest increase in weekly inflation was recorded at 3.38pc.

The year-on-year increase in the SPI was 38.63pc, the highest ever recorded. This is the highest increase recorded on a year-on-year (YoY) basis. Last week, the government increased the price of diesel while slightly lowering the price of petrol. The impact of diesel on prices will be visible in prices next week.

The PBS data shows that the prices of 33 essential food items increased during the week under review compared to the previous week.
Riaz Haq said…
From Wheat Exporter to Wheat Importer
Dr. Muhammad Shahbaz
July 17, 2022
The writer is research fellow at University of Cambrdige, UK and Professor at Biejing Institue of Technlogy China.


https://mmnews.tv/from-wheat-exporter-to-wheat-importer/


The agricultural sector is one of the largest contributors to the economy. While declining as a proportion of GDP, agriculture still contributes one-fifth of Pakistan’s wealth and almost half the population depends directly or indirectly on agriculture for their livelihoods. With 79.6 million acres of arable land, there is a great potential for improving efficiencies and productivity of the agriculture sector. The crop sector is an important sector of the economy which provides food to rapidly growing population of the country. The major crops consist of six main crops: wheat, rice, sugarcane, maize, chickpea and cotton. Wheat is Pakistan’s largest crop, in terms of area sown and is grown under different agro-ecological zones. Wheat flour currently contributes 72% of Pakistan’s daily caloric intake with per capita wheat consumption of around 124 kilograms (kg) per year, one of the highest in the world. In irrigated areas, wheat is planted after cotton, rice, and sugarcane, while in rain fed areas wheat is grown at the same time as maize and millet. The sowing of wheat takes place from October to December and harvests from March to May. Approximately 80% of farmers grow it on an area of around 9 million hectares (close to 40% of the country’s total cultivated land) during the winter.

Wheat is the most widely grown crop in the world. Wheat (Triticum aestivum) is one of the first domesticated food crops and has been the basic staple food of the major civilizations of Europe, West Asia and North Africa for last 8000 years. Approximately one sixth of the total arable land in the world is under wheat. It is most demanded food grain and its production leads all crops, including rice, maize and potatoes. In Pakistan, wheat being the main staple food cultivated on the largest acreages. Pakistan falls in ten major wheat-producing countries of the world in terms of area under wheat cultivation, total production and yield per hectare. Wheat is the essential diet of population as it constitutes 60% of the daily diet of common man in Pakistan and average per capita consumption is about 125 kg and occupies a central position in agricultural policies of the government. Based on cropping pattern, disease prevalence and climate, Pakistan has been divided into a ten production zones. However, production zones need to be revisited. In Pakistan, wheat is grown in different cropping systems, such as; cotton wheat, rice wheat, sugarcane wheat, maize wheat, fallow wheat. Of these, Cotton-Wheat and Rice-Wheat systems together account about 60% of the total wheat area whereas rain-fed wheat covers more than 1.50 m ha area. Rotations with Maize-Sugarcane, Pulses and fallow are also important.

Riaz Haq said…
Pakistan’s total grains imports, all of which are wheat, in 2021-22 are forecast at 2 million tonnes, down from 4 million the year before. The country is expected to export 200,000 tonnes of wheat, the same amount as in 2020-21.

https://www.world-grain.com/articles/15862-focus-on-pakistan

Production of rice in 2021-22 is forecast at 7.8 million tonnes, up from 7.6 million the year before. Exports of rice in 2021-22 are put at 4.2 million tonnes, up from 4 million.

The IGC also forecasts Pakistan’s imports of rapeseed at 900,000 tonnes, unchanged from the previous year.

In an annual report on June 24, the US Department of Agriculture (USDA) attaché puts Pakistan’s maize production in 2021-22 at a record 7.9 million tonnes, up from 7.8 million the previous year.

“Wheat is Pakistan’s largest crop, in terms of area sown and is grown under different agro-ecological zones,” the attaché explained. “In irrigated areas, wheat is planted after cotton, rice, and sugarcane, while in rainfed areas wheat is grown at the same time as maize and millet.

“Sowing of wheat takes place from October to December and harvests from the month of March to May. Approximately 80% of farmers grow it on an area of around 9 million hectares (close to 40% of the country’s total cultivated land) during the winter or ‘Rabi’ season.”

The attaché added, “Wheat is Pakistan’s main dietary staple. Pakistan has a variety of traditional flat breads, often prepared in a traditional clay oven called a tandoor.”

Wheat flour contributes 72% of calorific intake, with per capita wheat consumption at around 124 kilograms per person each year, one of the highest levels in the world. About 95% of wheat used in Pakistan goes for human consumption.

“As incomes increase and a stronger middle class emerges, consumers are gradually shifting toward more dairy, meat, and other higher-value food products in their diet,” the report said. “Over the long term, this shift to a more balanced diet has the potential to limit the pace of growth in wheat consumption.”
Riaz Haq said…
Wheat Consumption Determinants and Food Security Challenges:
Evidence from Pakistan
SANIA SHAHEEN, LAL K. ALMAS, MUHAMMAD USMAN


https://wseas.com/journals/ead/2022/a865115-797.pdf

Since 1975, 27% increase in
total area and 52% increase in yield per hectare for
wheat are reported. While, 33% increase in wheat
availability per capita was deemed insufficient. In
this situation, imports of wheat were the most
apparent result due to higher growth of population.
To fulfill the dream of food self-sufficiency,
government facilitated farmers by providing high
yielding varieties, fertilizers at a subsidized rate,
irrigation water at a lower rate than tube well water
etc. Though, these facilities have not been able to
reach the desire level of output mainly due to (i)
poor economic conditions of the farmers, lack of
knowledge on the latest useful techniques and
advancement. (ii) low price of production at
harvesting time made the farmers insecure about
investments they have done for inputs. (iii)
inappropriate land levelling along with late sowing
resulted in lower production. (iv) Insufficiency,
inequity, and unreliability in water distribution are
mutually affect the farmers irrigation calendars for
the wheat crop. Water stress to wheat at sensitive
stages, hinders the entire effort of production [20].

Riaz Haq said…
Finance Ministry launches ’75 Years Economic Journey of Pakistan’


https://www.app.com.pk/business/finance-ministry-launches-75-years-economic-journey-of-pakistan/

He (Finance Minister Miftah Ismail) said that a country with 30 million population in 1947 could not feed its population and had to import most of its food requirements from abroad, adding that today, local agriculture production has risen significantly and Pakistan was producing over 26.4 million metric tons of wheat annually as compared the total output of 3.4 million tonnes in 1948, besides cotton attaining a level of more than 8.3 million bales in 2022 compared to 1.2 million bales in 1948.

The sugarcane production, he said has reached to 88.7 million tonnes in 2022 as compared to 5.5 million tonnes in 1948 and rice output was recorded at 9.3 million tonnes during 2022 as against the total production of 0.7 million tonnes in 1948, the minister added.

Finance Minister said that Pakistan constructed both large and small dams like Tarbela Dam and Mangla Dam, which increased the water storage and availability to 131.0 MAF in 2022 from 63.9 MAF in 1965-66, adding that it helped in achieving sustain agriculture sector growth in the country.

He said that Pakistan emerged as one of the leading world exporter of textiles, pharmaceutical goods and food related items and economic policies of the successive governments have promoted industry, agriculture and services sectors.

The perseverance of its people made Pakistan the world’s 24th largest economy in terms of purchasing power parity and 44th in terms of Nominal GDP, he said adding that in fiscal year 1950, the Nominal GDP was Rs10.1 billion about $3.0 billion whereas, GDP per-capita was Rs286 with a population of 35.3 million.

In Fiscal Year 2022, Nominal GDP stands at Rs66,950 billion or $383 billion whereas, per-capita income has reached at $1,798 in 2022, he said adding that the country successfully established its trade and economic ties with different countries and entered into several global trading arrangements like WTO, SCO, WCO, the South Asian Association for Regional Cooperation, China Pakistan Economic Corridor, bilateral and multilateral agreements including EU-GSP Plus scheme.

Miftah Ismail said that all these successes were possible due to dedication, hard work and resilience of people of Pakistan, adding that enhanced economic governance have paved the way for a prosperous and strong Pakistan.

He further said that given the current economic fundamentals and sound economic policies being adopted by the present government, country was all set to become an economic power house of the world.

Meanwhile, Federal Secretary Ministry of Finance Hamed Yaqoob Sheikh said that the 75 years journey of Pakistan was a story of economic, political, social and regional events that has shaped the country that we live today.

He said that several boom-bust cycle, political crises and myriad geo-strategic challenges have guided our policies and program.

Today, he said Pakistan was ranked among 50 leading economies of the world with GDP amounting $383 billion, adding that it also established its vibrant banking system that supported economic development over the years .

Riaz Haq said…
India’s poorest scald as cooking oil prices soar

https://asia.nikkei.com/Spotlight/Feeding-Asia/India-s-poorest-scald-as-cooking-oil-prices-soar


India’s #poor scald as #cooking #oil prices soar. #India’s poorest are paying the highest cost for a #food #crisis long in the making and now turbocharged by events ranging from the war in #Ukraine to policy changes in global #trade. #inflation #Modi #BJP

India consumes 16.5 kg of cooking oil per capita, significantly higher than 9.5 kg in China, and nearly double 8.4 kg in the United States.
The numbers, skewed by heavier use in urban areas, mean that the world’s second most populous nation is particularly hit by the record highs. (Pakistanis consume 24 Kg per capita, the highest in the world)

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On a muggy April afternoon, Kumud Sahu wipes his face with an oily turmeric-stained handkerchief. He gulps water from a dimpled plastic bottle as he haunches on a wooden bench. It’s the only place to sit at his roadside eatery in the bustling working-class neighborhood of Jawaharlal Nehru Road in the eastern Indian city of Kolkata.

“Life has always been tough,” says Sahu, scanning the swarming crowds oblivious to the slow unraveling of the stalls that serve their affordable lunches. “But I haven’t seen tougher days than these. Business has been extremely bad and I am not sure how I can continue to feed my family.”

As the world’s largest importer of cooking oil reels from a steep ascent in its price, India’s poorest are paying the highest cost for a crisis long in the making and now turbocharged by events ranging from the war in Ukraine to policy changes in global trade.

India is reliant not only on cooking oil but on imported cooking oil. The South Asian nation consumes nearly 25 million tonnes of cooking oil a year, but produces only about 11 million tonnes. The gap is met through imports.

That creates a big and growing problem for a country whose population is expected to surpass China's and hit 1.7 billion people in the next three decades.

And experts say India will be unable to wean itself off this dependence for at least another two decades, as demand in a country that uses oil for much of its cuisine continues to far outpace production.

It is among the most disturbing examples of how a worldwide spiral in food prices has spooked billions of people and their governments. A deadly storm of pressures including war, pandemic and global heating has dramatically increased the cost of household food baskets in countries rich and poor. It has raised fears of mass impoverishment and social unrest, like that seen in neighboring Sri Lanka.

Sahu looks enervated. It has been 12 hours since he began his day in a room no bigger than 11 sq. meters, where he lives with his wife and three children. They share a bathroom with three other families in a longstanding tenement. Just before sunrise, he sets out for his eatery, cycling about 10 km. There he sells cheap, tasty lunches, oily curries with enough calories to keep his customers full until the next meal.

“Prices have increased so much that we can't imagine what will happen to the business if this trend continues,” he says, squinting in the harsh Kolkata sunlight. “I am putting in money from my savings to keep the business afloat.”

Sahu has shied from passing on the costs to his price-sensitive clientele, many of whom are shopkeepers and small business owners themselves.

With snowballing costs and a determination to keep his children in a school that is inexpensive but not free, Sahu was forced to sell a piece of rural land that he had hoped to keep as an asset for the years to come. “It bought me some time,” he said.

Pulling in around 60% of its cooking grease from overseas, India was hurting even before the Ukraine war as shipping costs, energy inflation and labor shortages, along with extreme weather, kept thrusting food and oil prices higher.

Riaz Haq said…
Pakistan's central bank unexpectedly raised its key policy rate by 100 basis points to 16% on Friday to ensure high inflation does not get entrenched.
The move brings the State Bank of Pakistan's (SBP) 2022 hikes to 625 basis points. It kept the rate unchanged at its last two meetings in October and September.

https://www.reuters.com/markets/asia/pakistan-cenbank-raises-key-rate-by-100-bps-16-curb-inflation-2022-11-25/

Analysts at the post-policy briefing told Reuters that SBP Deputy Governor Murtaza Syed said the bank responded as inflation had moved beyond a transient shock in food and energy prices to show up in core inflation.

Syed also said the bank did not want high inflation expectations to become entrenched, and aimed to get ahead of broader pressures on the economy, they added.
"Looks like SBP is more concerned with rising inflation. Moreover IMF talks for next tranche is under way and is delayed, that may have also compelled the committee to take this step to fight inflation," Topline Securities' Chief Executive Mohammed Sohail said.
Pakistan's timely finalisation of a recovery plan from the floods is essential to support discussions and continued financial support from multilateral and bilateral partners, the International Monetary Fund (IMF) said on Wednesday.
"Too much emphasis on current inflation," Fahad Rauf, head of research at Ismail Iqbal Securities, told Reuters. "On a forward looking basis, inflation is going to head downwards."
He estimated a drop in November CPI to 24% from 26.6% in October. Economic activity indicators signal a sharp slowdown and another rate hike will do more harm than good by increasing the government's debt burden, hurting the private sector and causing higher unemployment, he added.
The SBP affirmed a Gross Domestic Product estimate of about 2% for fiscal 2023 and a current account deficit forecast of about 3% of GDP. However, it now expects higher food prices and core inflation to push average inflation to 21-23% instead the previous estimate of 18-20%.
Riaz Haq said…
Pakistan’s Rising Palm & Soybean Imports: Understanding Key Drivers and Challenges
By Sohaib Jamali Senior Economist at the State Bank of Pakistan (SBP).

https://devpakblog.com/2022/05/30/pakistans-rising-palm-soybean-imports-understanding-key-drivers-and-challenges/

Pakistan’s imports of palm and soybean products have risen 55 percent in 1HFY22, following a 47 percent increase in FY21. While this recent growth stems from soaring international commodity prices, the overall trend is not a new phenomenon. Combined imports of palm and soybean have more than doubled over the last twenty years, rising to 7.1 percent of total imports in FY21, amid waning reliance on domestic sources (sunflower, canola, & cottonseed) for edible oil and meals for animal feed.

Palm and soybean are the world’s most used crops for edible oil and oilseed meals because of their high resource-use-efficiency, measured in terms of oil yield per hectare for oil, and protein yield in the case of meals. The former is important to meet the requirements of a growing human population and rising per capita consumption. The latter is important to feed ruminants, poultry, and aquatic foods, since protein-based meals enable faster and healthy growth of these animals.

In Pakistan’s case, the demand for edible oil is being driven both by growing population and rising per capita consumption. Contributing to the latter is a dietary preference for higher oil use, as suggested by cross country comparison of per capita edible oil consumption. And because palm oil is generally cheaper than other types of edible oils, Pakistan imports palm oil the most compared to other oils.

Similar demand drivers are at play in the case of oilseed meals. Growing population and rising per capita income are stoking the demand for poultry, livestock and farmed aquatic foods, which in turn creates a demand for oilseed meals as key components of animal feed. And following the fast paced modernisation of the domestic poultry industry, the demand for soybean meals has increased manifold. The growing modernisation of the dairy and meat industry, as evidenced by an increasing number of corporate meat and dairy brands, is also creating a demand for soybean-based meals.
Riaz Haq said…
Pakistan's oilseed industry to bloom under China-Pakistan agriculture cooperation

https://english.news.cn/20230227/190423d59d2a43f7ae2855a1d1472321/c.html


To help Pakistan meet its edible oil demand and support its foreign exchange reserves, Chinese company Wuhan Qingfa Hesheng and Pakistani company Evyol group jointly provide high-quality hybrid canola seeds to Pakistani farmers.

GUJRANWALA, Pakistan, Feb. 27 (Xinhua) -- On a sunny February morning, the air in a small village in Pakistan's east Gujranwala district carried the sweet scent of canola flowers, which were dancing gently in the breeze.

Bees whirling on the profuse yellow blossom beaming with lush green pods were not only a view to behold, but also heralded the beginning of a new chapter in the lives of local businesspeople and farmers, who are shifting to a Chinese hybrid variety of canola seeds to reap higher yields and produce cooking oil at home.

"We sowed the new variety on 100 acres of land because of their potential to produce higher yields and more oil as compared to other oilseeds including mustard and rapeseed, which we previously used to cultivate," Intisar Ahmad Chattha, the farm's manager told Xinhua while carefully watching the pods.

Pakistan's annual consumption of cooking oil is around 5 million tons, but due to the low economic potential of oilseeds in the local market, they are not preferred by the farmers. The country has to import about 89 percent of oil to meet the demand, spending 3.6 billion U.S. dollars annually.

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Ghazanfar Ali, head of marketing in Evyol group told Xinhua it took them 10 years to produce a variety that is compatible with the local climate, produces a good yield and is good for human health.

The crop provides an increased profit for the farmers as its standard 2 kg pack is enough to cultivate 2 acres of land, and the farmer can get 1.5 tons of yield out of it, which is over 10 percent more than the yield from other varieties currently available in Pakistan, he said, when talking about the potential of the crop.

Zhou Xusheng, director of the international business department of Wuhan Qingfa Hesheng Seed company, told Xinhua that his company is working on transferring technology to Pakistan to make it efficient in smart agriculture.

"Through this project, we want to transfer the harvesting technology through which the farmers can use some attachments on the harvesters they already have and reduce the wastage," he said.

His company also wants to introduce processing units across the country, through which even in villages people can install them and produce processed oil for themselves and sell it to others, Zhou added.

He said that the seed is suitable for the environment across Pakistan, and this year they sold 11 tons of seeds across the country, which will be cultivated on 20,000 acres, and their target for next year is 100 tons, which will bring a great change to Pakistan by helping the country become self-sufficient in edible oil production.

The Chinese company will also buy back the canola harvest from some of the farmers and send it to the edible oil factories so that both farmer and the factory owners can realize the potential and health benefits of the oil, Zhou added.

"When Pakistan imports oil, it spends a lot of money and receives only the finished product. But when oil is produced locally, it will generate job opportunities, build an industrial chain and utilize the cakes after oil extraction as power-packed canola meal for cattle," he added.

Talking about the demand for canola meal in Pakistan, Chattha said that they have over 800 cows in the dairy farms in the area and to provide them with good quality food they have to import canola meals, which is a big financial burden due to the devaluation of the local currency.

Riaz Haq said…
Edible oil’s rocky year - Profit by Pakistan Today

https://profit.pakistantoday.com.pk/2022/12/31/edible-oils-rocky-year/


The year 2022 was not a walk in the park for both the producers and the consumers of palm oil. The year saw historic highs and record lows in the palm oil market causing volatility and at times losses as well.

According to the State Bank of Pakistan, Pakistan imported Palm and Soybean oil in excess of $3.3 billion this year. This is a 33% increase as opposed to the FY21. Despite import restrictions in place. Pakistan has already imported a considerably larger amount of palm and soybean oil between Jul-Nov in FY23, than it did in FY22.

Being such a major import, the prices of palm oil are almost as important as any other global commodity. Let us have a look at how the prices of Palm oil were affected throughout the last year, and how that can act as a lesson for the years to come.
Riaz Haq said…
Palm oil's rare premium leads to 'wash out' in India -dealers | Reuters


https://www.reuters.com/markets/commodities/palm-oils-rare-premium-leads-wash-out-india-dealers-2023-04-19/


MUMBAI, April 19 (Reuters) - Indian buyers have opted to cancel 75,000 tonnes of palm oil purchases for the first time in many years and switch to rival soft oils, such as sunflower oil and soyoil, five industry officials told Reuters.

Palm oil usually trades at a discount to soft oils, but import restrictions by top producer Indonesia have helped to push palm oil to a premium, making sun oil and soyoil more attractive to buyers.


This has prompted some Indian buyers to reduce purchases of palm oil for May shipments and increase soft oil imports. They can do this via mutual agreements with importers to cancel the sales - a process known locally as a "wash out".

This allows a buyer to sell back a product to the seller based on a pricing formula that includes the prevailing market price.

Lower palm oil imports by India, the world's biggest buyer of vegetable oils, could weigh on Malaysian palm oil prices , but support soyoil and sunflower oil prices.


A few buyers decided to opt for a wash out because of negative margins prevailing in the local market, said Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage and consultancy firm.

Crude palm oil (CPO) imports are currently being offered at about $1,050 a tonne, including cost, insurance and freight (CIF), in India for May delivery, while palm oil imported in the past few months is now priced between $1,000 to $1,010, dealers said.

Wash outs are relatively rare in the Indian vegetable oil industry and the quantity is usually small at around 5,000 to 10,000 tonnes, said a Mumbai-based dealer with a global trade house.

"Big wash out is happening because of unusual price movement in palm oil. It has been rising even as other oils are falling in the past few months," said the Mumbai-based dealer.



Price-sensitive Asian buyers traditionally rely on palm oil because of low costs and quick shipping times. But palm oil has moved to a premium at the same time as soft oil prices have dropped, partly due to a record rapeseed crop.

Palm oil's discount to rival oils was much as $500 in the December quarter, but now it is holding a rare premium of more than $30 per tonne over sunoil for May shipments, dealers said.

Indian buyers are replacing palm oil with soyoil and sunflower oil for shipments in May, said Rajesh Patel, managing partner at GGN Research.

India's palm oil imports in May could fall to 700,000 tonnes, compared with an average monthly import of 879,000 tonnes so far in 2022/23 marketing year ending on Oct. 31, dealers said.

India buys palm oil mainly from Indonesia, Malaysia and Thailand. It imports soybean and sunflower oil from Argentina, Brazil, Russia and Ukraine.



Riaz Haq said…
Flour crisis deepens in Pakistan | World Grain

https://www.world-grain.com/articles/18326-flour-crisis-deepens-in-pakistan

ISLAMABAD, PAKISTAN — Despite slight increases expected for wheat production and imports in Pakistan, consumption is forecast to outstrip supply in marketing year 2023-24 in the country with the world’s fifth largest population, according to a Global Agricultural Information Network report from the Foreign Agricultural Service of the US Department of Agriculture (USDA).

Although a slight reduction in planted area is anticipated, wheat production in Pakistan is projected to increase 2% to 27 million tonnes, with wheat yield expected to rise due to favorable weather conditions and better availability of irrigation water. However, wheat consumption is forecast to increase 3% in 2023-24, the USDA said, in one of the fastest growing countries in the world with a population of 233 million. The shortage of wheat, which accounts for 72% of Pakistan’s daily caloric intake, has caused a flour-availability and affordability crisis in Pakistan.

“High inflation has made it difficult for consumers to afford milk and meat, reversing the trend of more protein and less carbohydrates in the diet,” the USDA said. “As a result, consumption of wheat flour-based products is rebounding.”

But the supply is not rebounding at the same rate, in part due to the weather, the Russia-Ukraine war and other factors, causing many of the country’s citizens to wait in long lines in hopes of getting a bag of government-subsidized flour. Dozens of people have been trampled to death or injured in recent weeks when crowds have rushed forward to try to get the flour.

According to a recent World Food Programme report, the prices for staple cereals, pulses, and non-cereal food commodities continue to increase in Pakistan. It noted that the price of wheat flour has increased by 74% year-on-year.

“The price of wheat and wheat flour has continued to increase in the country due to various factors, including the tight supply of private wheat, hoarding and profiteering,” the WFP report said.
Riaz Haq said…
As of March 2023, Pakistani authorities still ban genetically engineered (GE) oilseed imports. While they have made some progress in developing a system to allow for GE oilseed imports, uncertainty regarding when that system will be operative clouds the outlook for oilseed imports. Similar uncertainty surrounds domestic meal and oil production forecasts. With expectations for better cottonseed production, total oilseed production in 2023/24 is projected to increase to 2.95 million tons, a 24 percent above than 2022/23. In line with population growth, edible oil demand is forecast to grow about 5 percent, and palm oil imports are forecast to grow accordingly, reaching 3.6 million tons (15 Kg per person) in 2023/24.

https://www.fas.usda.gov/data/pakistan-oilseeds-and-products-annual-7

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India’s oilseeds production in marketing year (MY) 2023/2024 (October-September) is forecast to remain flat at 41.5 million metric tons (MMT), mostly unchanged from MY 2022/2023. Unseasonably heavy spring precipitation and a predicted El Niño weather pattern in the wake of severe April-June heatwaves will expose summer oilseed crops to greater incidences of plant stresses and thus impact yields. Oil meal production will remain steady at 20 MMT while exports will fall to 1.9 MMT, following an exceptional increase in exports in the current MY as southeast Asian demand has favored competitively priced Indian oil meals against other origins. India will remain among the largest consumers of edible oils and is forecast to import 14.5 MMT (10 Kg per person) of various oil commodities in the outyear. Global decline in oilseed prices and relatively low import duties have stabilized domestic edible oil prices, leading to record ending stocks in the current year.

https://www.fas.usda.gov/data/india-oilseeds-and-products-annual-7
Riaz Haq said…
Feature: Chinese canola crops transform Pakistan's cooking oil industry, boosts local economy-Xinhua


https://english.news.cn/asiapacific/20230529/a7d93b309d814273849cb88cacf98bfe/c.html

Pakistan's annual consumption of cooking oil is around 5 million tons, but due to the low economic potential of oilseeds in the local market, they are not preferred by the farmers. The country has to import about 89 percent of its oil to meet the demand, spending 3.6 billion dollars annually.

Dealers associated with oilseed distribution have said that the newly introduced variety has a high-profit margin for the farmers and, as such, it has become famous among local farmers just two years after its introduction in Pakistan.

Muhammad Rizwan, a seed distributor in Gujranwala, told Xinhua that the Chinese canola seed is resistant to diseases and has a higher yield than other previously available oilseed varieties on the market.

"Other oil seeds were sold for about 5,000 to 6,000 rupees per 40 kg on the market this year, whereas the Chinese canola was sold for up to 9,500 rupees, it also had a 20 percent to 30 percent higher yield than the other varieties," Rizwan explained.

"The seed is now a hot cake in the eyes of farmers in the Gujranwala district so we have placed a higher order than last year to the seed company to meet the demand in the next cultivation season in November this year," he added.

Last year, 11 tons of seeds were cultivated on 20,000 acres of land across the country, while this year 100 tons are expected to be cultivated due to a higher demand for the seed.

Housewife Saima Rizwan told Xinhua that she came to know about this oil six months ago from social media and how the oil extracted from Chinese canola is beneficial for health besides being cost-effective.

"I asked my husband to buy the oil and its taste was so good that we have never bought imported oil since. We cook all local dishes in the oil, and sometimes when we invite guests, they can't tell the food is cooked in canola oil rather than the commonly used palm oil," the 32-year-old told Xinhua.

Muhammad Azim, team leader of Eyvol group in Gujranwala, said that it was a bumper yield of canola this year compared to other crops, due to which farmers were very happy.

"It is a new beginning because farmers are making a good profit as consumption of locally produced oil increases," said Azim.

"As a next step, we will focus on local production of the seeds in Pakistani nurseries with the help of our Chinese friends to make the seeds more affordable for the local farmers," he said.
Riaz Haq said…
Peanuts to solve high edible oil prices issue
Pakistan, China join hands to increase planting area, crop yield

https://tribune.com.pk/story/2404516/peanuts-to-solve-high-edible-oil-prices-issue


Lately, Rainbow’s high-oleic-acid peanut cultivation base project was formally included in the China-Pakistan agricultural cooperation framework by the Ministry of Agriculture, China.

“As you can see, our seed registration with Pakistan Agricultural Research Council (PARC) has started. A total of five high-oleic peanut varieties for oil extraction of Runhua series have been trial-planted in Pakistan, which is expected to achieve fruitful results,” revealed Fan Changcheng, Deputy General Manager of Rainbow.

“Next, our aim is to increase the area gradually to 1,500 hectares in the coming years,” he said.

“My country has a long tradition of peanut planting. Peanuts like warm environment with sufficient sunlight, with loose and breathable sandy loam as the most suitable soil condition. The Potohar region of Punjab is the best area for peanut production,” Ijaz stated, adding that peanut seeds contain 40-50% oil and the high-oleic peanut oil is rich in unsaturated fatty acids.

“During our trial, we always focused on how the local environment can act on the quality of seeds on the whole. The varieties we selected have the highest oleic acid content, up to 75-80%, which means very high nutritional value.”

“Self-sufficient in peanut production means that we can reduce our import bill of edible oil,” said Muhammad Jahanzaib, Scientific Officer of the Oil Seed Research Programme in NARC Pakistan.

Statistics of the US Department of Agriculture showed that Pakistan’s peanut planting area in 2022-23 is about 150,000 hectares, with total output of 140,000 metric tons.

THE ARTICLE ORIGINALLY APPEARED ON THE CHINA ECONOMIC NET
Riaz Haq said…
Pakistan: Oilseeds and Products Annual | USDA Foreign Agricultural Service


https://www.fas.usda.gov/data/pakistan-oilseeds-and-products-annual-7

As of March 2023, Pakistani authorities still ban genetically engineered (GE) oilseed imports. While they have made some progress in developing a system to allow for GE oilseed imports, uncertainty regarding when that system will be operative clouds the outlook for oilseed imports. Similar uncertainty surrounds domestic meal and oil production forecasts. With expectations for better cottonseed production, total oilseed production in 2023/24 is projected to increase to 2.95 million tons, a 24 percent above than 2022/23. In line with population growth, edible oil demand is forecast to grow about 5 percent, and palm oil imports are forecast to grow accordingly, reaching 3.6 million tons in 2023/24.

Riaz Haq said…
The rise in global cotton production is led by the US, Pakistan, and India, with a drop in China's output due to cooler weather conditions.

https://www.fibre2fashion.com/news/textile-news/global-cotton-production-forecast-to-hit-4-year-high-in-fy24-usda-288228-newsdetails.htm

Global cotton production in FY24 is forecast to reach a four-year high of 116.7 million bales, up slightly from the previous year, as per USDA.
The rise is led by the US, Pakistan, and India, with a drop in China's output due to cooler weather conditions.
Australia's FY24 cotton production is projected at 5.8 million bales, 300,000 bales above FY23.


World cotton production is projected to reach a four-year high of 116.7 million bales in 2023-24 (FY24), according to the US Department of Agriculture (USDA). The expected growth in production represents a slight increase of 400,000 bales from the previous year.
The increase is predominantly driven by the major cotton-producing countries, with the US and Pakistan leading the charge. Both countries are projected to see a significant rise in production, each adding 2 million bales to the global yield. India is also expected to contribute to the surge, albeit on a lesser scale, with an additional half a million bales.

However, these gains will be partially offset by a reduction in output from China, the world's leading cotton producer. The Chinese crop is anticipated to shrink by 3.7 million bales in the 2023-24 season due to cooler than normal temperatures early in the growing season in China's Xinjiang region, which could limit yield potential. This decrease means China's contribution to global cotton production is expected to shrink from 26 per cent in 2022-23 to 23 per cent in 2023-24, as per USDA’s Cotton and Wool Outlook: June 2023 report.

Meanwhile, India is set to buck this trend with a projected 2-per cent increase in cotton production from the 2022-23 crop. This rise comes despite an expected reduction in harvested area, with alternative crops predicted to reduce cotton acreage to 12.4 million hectares. A rebound in yield is set to offset this, with the national yield forecast at 448 kg per hectare, the highest in three years. India's share in global cotton production is set to remain steady at approximately 22 per cent.

Outside of the US, other countries including Brazil, Pakistan, and Australia are also projected to see an increase in cotton production. Brazil's output is expected to hit 13.25 million bales, slightly above the 2022-23 figure and second only to 2019-20's record of nearly 13.8 million bales.

Pakistan's cotton production is set to rebound from the nearly four-decade low of 3.9 million bales recorded in 2022-23 due to flood damage. The forecast production of 5.9 million bales for 2023-24 will account for 5 per cent of global production.

Lastly, Australia's 2023-24 cotton production is projected at 5.8 million bales, 300,000 bales above 2022-23 and close to 2021-22’s record of 5.85 million bales, supported by above-average reservoir levels.

Riaz Haq said…
Oilseeds in Pakistan


https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Oilseeds%20and%20Products%20Annual_Islamabad_Pakistan_PK2023-0007.pdf

Oilseed Production:
Following last year’s flood-damaged cottonseed crop, total oilseed production in 2023/24 is projected to
increase 24 percent to 2.9 million tons, driven by a rebound in cottonseed production. While cottonseed
production is forecast to recover, little change is expected for rapeseed and sunflower production as
returns for other crops hinders oilseed area expansion.
Both rapeseed and sunflower production in 2022/23 are forecast to increase, but their share in total
oilseed supplies will remain at only about 20 percent. The government offered a 12,500 rupees ($50) per
hectare subsidy for oilseed growers in Punjab, which is one reason for the increase in canola output.
Nonetheless, the government generally also offers a generous guaranteed price for wheat, which
competes directly with rapeseed for area. Because of the more profitable guaranteed price offered for
wheat, growers will favor planting wheat over oilseeds. As a result, no expansion in rapeseed nor
sunflower seed production is expected for 2023/24. Domestic soybean production is insignificant.
Cottonseed:
Cottonseed production in 2023/24 is projected at 2.3 million tons, a 34 percent increase over the 2022/23
output. This increase reflects expectations for a recovery in yield following the flood-damaged 2022/23
output. Cottonseed is the principal oilseed crop grown, accounting for more than 70 percent of domestic
oilseed production. Cottonseed production is driven by demand for cotton lint from the local textile
sector, which is Pakistan’s number one export-oriented manufacturing industry. Despite the textile
sector’s requests and government efforts to increase cotton production, cottonseed output has been
declining for several years.
Rapeseed:
Due to better returns from crops (mainly wheat) that compete with rapeseed for area, no increase in
rapeseed production in 2023/24 is expected. Output in 2022/23 is forecast to increase as government
subsidies resulted in an increase in planted area.
Sunflower Seed:
Sunflower seed area and production are expected to decline in 2023/24 due to better returns from other
crops.
Consumption:
In 2023/24, total oilseed use, almost all of which is for crushing, is forecast at 3.6 million tons, 17
percent higher than the 2022/23 estimated use. Total installed crushing capacity is around 8 million tons
and no additional capacity going to be added in system. This higher consumption forecast assumes the
government removes the ban on GE soybean imports, which will then result in increased crushing for
poultry feed.
As a result of the import ban, oilseed use in 2022/23 is estimated to decline at least 21 percent. The
lower oilseed crushing has resulted in a commensurate decline in poultry feed consumption and poultry
meat production. Since the government abruptly halted soybean imports in November 2022, poultry
meat output is off about 31 percent and poultry prices have more than doubled.
Riaz Haq said…
Pakistan aims to boost oilseed cultivation


https://tribune.com.pk/story/2430331/pakistan-aims-to-boost-oilseed-cultivation

The Chinese Academy of Agricultural Sciences (CAAS) has been instrumental in developing new rapeseed varieties, which have been adopted in some northern regions of China. The success of these efforts has enabled China to rotate rapeseed(Canola) crops with staple crops like rice and wheat, maximising land utilisation.

Pakistan is now tapping into this experience by collaborating with Chinese company Wuhan Qingfa-Hesheng and Pakistani firm Evyol Group. Together, they are providing high-quality hybrid rapeseeds (Canola) to Pakistani farmers. Ghazanfar Ali, head of marketing at Evyol Group, emphasised the suitability of their variety for local climate conditions. “It took us 10 years to produce a variety that is compatible with the local climate, produces a good yield and is good for human health,” he said, noting that farmers can achieve 1.5 tonnes of yield from 2 acres of land, surpassing current varieties available in Pakistan by over 10%.

Zhou Xusheng, director of the international business department at Wuhan Qingfa-Hesheng Seed company, outlined their ambitions. “This year we sold 11 tonnes of seeds across Pakistan, which will be cultivated on 20,000 acres, and our target for next year is 100 tonnes.” He also highlighted their intention to purchase the canola harvest from certain farmers and supply it to edible oil factories, thereby promoting the benefits of locally-produced oil.

Riaz Haq said…
Pakistan’s annual consumption of edible oil is around 5 million tons, but due to the low economic potential of oilseeds in the local market, they are not preferred by the farmers. The country has to import about 89 percent of oil to meet the demand, spending US$3.6 billion annually.

https://dailytimes.com.pk/1122982/chinese-company-to-help-pakistan-boost-edible-oil-production/

Pakistan’s iron brother, China, also has great demand for edible oil. Last year, China’s cooking oil consumption is about 13.44 million tons. China also suffered a short domestic supply of edible oil until the mid-1950s, when China began to promote brassica napus, also known as victory rapeseed. Brassica napus plants are tall, disease resistant, and more importantly, the yield is very high. The improvement of rapeseed varieties laid the foundation for China to greatly increase rapeseed production.

In recent years, the Chinese Academy of Agricultural Sciences (CAAS) has made a great breakthrough in breeding new varieties of rapeseed, which have been extended to some parts of northern China. Rapeseed now realized seasonal rotation with rice, wheat and other staple crops, which maximizes the utilization of arable land. Such Chinese experience and technologies can be a good reference for Pakistan, according to CEN.


Chinese company Wuhan Qingfa-Hesheng and a Pakistani company Evyol Group jointly provide high-quality hybrid rapeseeds to Pakistani farmers. “It took us 10 years to produce a variety that is compatible with the local climate, produces a good yield and is good for human health,” said Ghazanfar Ali, head of marketing in the Evyol group. “The crop provides an increased profit for the farmers. They can get 1.5 tons of yield out of 2 acres of land, which is over 10 percent more than the yield from other varieties currently available in Pakistan.”

“This year we sold 11 tons of seeds across Pakistan, which will be cultivated on 20,000 acres, and our target for next year is 100 tons,” said Zhou Xusheng, director of the international business department of Wuhan Qingfa-Hesheng Seed company.

The Chinese company will also buy back the canola harvest from some of the farmers and send it to the edible oil factories so that both farmer and the factory owners can realize the potential and health benefits of the oil.

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