Mian Shakil Ashfaq has been involved in the edible oil business since 2000 when he co-founded Shujabad Agro Industries (Pvt) Limited. At the time, the company’s oilseed crushing unit was the first of its kind in Karachi. In 2006, it entered the edible oil manufacturing and marketing business with the launch of flagship brand called Eva. In addition, the company’s Maan cooking oil brand caters to lower socioeconomic categories.

Shujabad Agro Industries has two profit centers: oilseed crushing business which crushes imported soybean and canola seeds, used in preparation of poultry and livestock feed; and, the cooking oil and vegetable ghee/vanaspati manufacturing and marketing segment. The company has a network of 300 distributors across the country, along with warehouses in five regions.

Ashfaq completed his education from Wichita State University, Kansas (USA) in 1994, following which he joined the family business. In addition to his position as the CEO of the business, Ashfaq is a member of All Pakistan Solvent Extractors' Association (APSEA), the representative trade body industry for which he had also served as President between 2018-19. He has also served as the President of Bin Qasim Association of Trade and Industry (BQATI), and an Executive Committee member of Pakistan Vanaspati Manufacturers' Association (PVMA).

BR Research recently sat down with Ashfaq in Karachi earlier this month to discuss the crisis of stuck-up soybean and canola cargoes at Karachi port, which many claim had put the survival of local poultry industry at stake. Below are the edited excerpts:

BR Research (BRR): What transpired in the meeting of National Assembly’s Standing Committee on Food Security & Research on November 30th, 2022?

Mian Shakil Ashfaq (MSA): All Pakistan Solvent Extractors’ Association (APSEA) representatives were invited to the meeting at the invitation of committee’s chairman, MNA Rao Muhammad Ajmal Khan. He noted that the negligence and delay by the federal government in resolving the issue of stuck-up soybean and canola cargoes could potentially result in a shortage of poultry across the country. The Food Security minister took exception and accused the committee chairman of representing vested commercial interests. He further demanded that representatives of the solvent extraction industry be excluded from the proceedings of the committee.

This led to a further exchange of heated words between the parties. The session was adjourned without any meaningful progress. Unfortunately, APSEA did not receive an opportunity to dispel the misconceptions held by the minister on the subject, which were clearly based on misinformation and fake news. The minister, for example, claimed that consumption of GMO soybean (for human food) was banned in the USA, which is of course blatantly false. US Embassy Islamabad also issued a statement on the issue, clarifying the status of GMO food safety in that country.

BRR: Federal government is yet to issue any license for import of GMO products into Pakistan. Until now, under what arrangement were these goods making their way to Pakistan?

MSA: Pakistan is a GMO country. Our cottonseed is genetically modified and is part of our food chain. Cottonseeds are used to extract oil cake, which are fed to dairy and cattle, while soybean and canola seeds imported for solvent extraction are also GMO.

GMO soybean and canola seeds are imported only for edible oil extraction and livestock meal preparation – that is, for food, feed and processing (FFP). They are not imported for domestic cultivation, and Pakistan does not have a significant local soybean crop. Ever since Pakistan began to import soybean and canola from USA and Brazil, the regulatory authorities have been made fully aware about the facts on the ground.

The National Biosafety Committee empowers the Environmental Protection Agency (under Ministry of Climate Change) to issue license for import of GMO products. Currently, Pakistan’s Biosafety Rules and Biosafety Guidelines create no distinction between genetically modified seeds imported for cultivation, and seeds imported for processing (FFP).

In March 2018, APSEA members applied for license to import GMO soybean and GMO canola into Pakistan for Food, Feed, and Processing (FFP) purposes. However, as no mechanism is in place to seek approval for import of plant material – GMO soybean and canola seeds – for just FFP (and no cultivation), the request has remained unresolved. Thus, our application for import has been pending with the National Biosafety Committee since March 2018.

BRR: What is the process of approval and has APSEA been made aware of its current status?

MSA: The approval is a two-tier process. First, a Technical Advisory Committee (TAC) made up of subject experts reviews and evaluates the proposal, and then makes recommendation to National Biosafety Committee (NBC). NBC formed a sub-committee in August 2020, which has made recommendations for approval. These recommendations are now pending with NBC since early 2022.

BRR: Does APSEA suspect malfeasance?

MSA: To our understanding, the federal minister for Food Security was not made aware of these developments. It must be noted that MNFS&R’s representation in the Technical Advisory Committee had previously supported the recommendation to approve and issue license for import of GMO soybean and GMO canola.

GMO safety has been a victim of targeted misinformation campaigns, and as such it is not surprising that politicians may lack awareness on the issue. However, industry and technical experts should be given due opportunity to present facts of the case so the political leadership may take informed decisions on any controversial subject.

BRR: Would you acknowledge that import of GMO commodities such as soybean and canola were taking place under an ambiguous arrangement?

MSA: As the proceedings of the Technical Advisory Committee and National Biosafety Committee would show, the authorities were made fully aware of the exceptional circumstances. It must be noted that this is not the first time when shipments have been halted. Back in April 2022, soybean shipments were halted under the pretext that they contained very high levels of aflatoxin. When APSEA requested that the cargo be re-tested, the request was declined, and the matter remained pending for several months.

In 2015, soybean meal shipments from India were banned claiming that they had tested positive for traces of pork. Such issues keep re-emerging because no mechanism has been designed to address them. The Department of Plant Protection has complete discretion to destroy or order re-exports of any consignment it deems unsatisfactory.

In October 2022, APSEA members were informed that Customs Intelligence has recommended testing of imported soybean cargoes as these may be GMO and thus in violation of law. APSEA acknowledged that no testing was required, as the cargoes are indeed genetically modified. We presented the copy of non-binding MoU signed between the regulatory authorities of exporting countries such as USA and Brazil, and Department of Plant Protection Pakistan, under which these imports are allowed thus far.

Under this MoU – or arrangement – it was agreed that soybean and canola consignments imported by Pakistan would not be tested for their GMO status, but instead would be fumigated with methyl bromide upon unloading. We understand that fumigation with methyl bromide does not have any scientific basis. However, the process was agreed upon to ensure business continuity upon insistence of Pakistani quarantine authorities.

BRR: According to our research, the license /approval for import of regulated plant materials into Pakistan requires an explicit declaration whether a given consignment of goods is GMO or not. Do GMO soybean and canola importers make any declaration to this effect?

MSA: To my knowledge, this column is intentionally left blank. However, the conditions under the same import permit state that in case any consignment does not meet the standards laid out by DPPQ, it must be fumigated with methyl bromide to ensure de-vitalization of seeds before being released in local environment. This, according to DPPQ, ensures that GMO seeds may only be used for food, feed, consumption and processing; and not for cultivation. The phytosanitary certificate issued by the US government refers to the same import permit as well, and thus, complies with the conditions to allow export of goods to Pakistan.

BRR: It appears that the latest controversy has laid bare that the department of Plant Protection (DPPQ) did not have the mandate or authority to allow import of GMO products, as the license must be issued by EPA after recommendation of NBC only. Is this understanding correct?

MSA: Yes, but as we see it, these are two different problems. The immediate crisis is to secure release of nine cargoes carrying 615,000 metric tons of goods that are worth $450 million. As per Biosafety Rules 27, government of Pakistan can direct the NBC to release the cargo as a one-time exception in public interest.

Such actions are not without precedent. The federal government itself has imported GMO soybean from the USA twice in the past. The first time was in 2002 as compensation in lieu of markup payment for delayed F-16 shipments, and the other time in 2004 under the PL-480 program. In both instances, the solvent extraction industry processed the GMO cargoes imported by government of Pakistan.

BRR: Why did APSEA not approach the courts?

MSA: The last time APSEA approached courts in a similar matter; it took a very long time before a final judgment was issued. The latest issue has now been ongoing for almost two months, and we hope for an earlier resolution by appealing to the good sense of our policymakers. Each shipment faces demurrage of up to $40,000 per day. Multiply that by nine ships. Two of these ships had been offloaded earlier, but are facing port demurrages. Port demurrage is close to Rs 50 per ton per diem held in a bonded warehouse.

Any further delay in resolution of this matter will not only cause a potential shortage of poultry products in the country; the amount of investment at stake means the commercial survival of solvent extraction industry is at stake.

The business confidence of suppliers and bankers is shaken to the very core. Going forward, neither the suppliers nor the banks would be willing to accommodate future imports unless permanent license for imports is in place, duly issued by EPA and NBC. Although Federal Tax Ombudsman’s (FTO’s) latest intervention may help offer a one-time fix, government of Pakistan must take cognizance of the issue and address the GMO import question once and for all. Otherwise, the future of both poultry and solvent extraction industries will remain uncertain.