Karachi: The Chairman Pakistan Vanaspati Manufacturers Association (PVMA) Sheikh Umer Rehan has
called on the government to take urgent measures to address the challenges in the edible oil supply
chain by reducing duties on alternative oils like soybean, canola, and sunflower oil. This proposal aims to
diversify imports and reduce Pakistan's heavy reliance on palm oil, which constitutes a significant part of
the country’s vegetable oilp consumption.
PVMA Chairman Sheikh Umer Rehan highlighted the looming global palm oil shortage caused by
Indonesia’s bio-diesel policies. Indonesia, which supplies 90% of Pakistan’s palm oil imports, plans to
increase the blending ofp palm oil in bio-diesel to 40% by January 2025 and 50% by January 2026. This
shift, along with past export bans imposed by Indonesia due to rising domestic prices, has raised
concerns about the stability of Pakistan's supply chain. Pakistan, as the world’s third-largest importer of
palm oil with an annual import volume of 3.5 million tons, has faced significant challenges when such
restrictions were previously imposed.
In light of these developments, Sheikh Umer Rehan urged the government to negotiate consistent
supply commitments under Pakistan's Preferential Trade Agreement (PTA) with Indonesia. He also
suggested initiating discussions with Thailand, an emerging palm oil producer, to explore a new PTA,
while maximizing opportunities under the Free Trade Agreement (FTA) with Malaysia.
Additionally, Sheikh Umer Rehan pointed out that soybean and canola oils are currently cheaper than
palm oil globally but remain underutilized due to high regulatory duties. He emphasized the need for a
flexible duty structure that aligns with global edible oil price trends, enabling Pakistan to capitalize on
lower-cost alternatives. Reducing duties on these oils would not only ensure a stable supply but also
ease pressure on Pakistan’s foreign exchange reserves and local prices.
The PVMA chairman urged the government to collaborate with industry stakeholders to monitor global
price trends and adjust regulatory duties accordingly. He warned that failure to act swiftly could lead to
economic strain, rising local prices, and further dependency on volatile palm oil supplies.
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