Pakistan Edible Oil Industry: Yesterday, Today and Tomorrow

Pakistan Edible Oil Industry is one of the oldest Industries in Pakistan. The first plant setup in Sindh was Bengal Oil Mills at Old City, Karachi and according to my memory the plant was opened by the then Governor General Quaid-e-Azam, Muhammad Ali Jinnah. Amongst the other old plants were Ganesh Oil Mills in Faisalabad and Unilever in Rahim Yar Khan.

After partition, Pakistan used to import Edible Oil and Vanaspati from various sources and the Ghee production was almost 30% of the requirement. If my memory goes right, Pakistan bought PL-480 Aid from the United States for the import of Soybean Oil which was 100% free but Pakistan had to pay the transportation charges and other miscellaneous charges. From 1955-1965 the main dependence of Pakistan was on Soybean Oil mainly imported under PL-480 Aid.

I have narrated in my past article how the PL-480 worked and my personal experience of buying under PL-480 Aid. As Chairman of PVMA in 1958, I was asked to lead the Pakistan delegation to buy Soybean Oil under PL-480.

In 1968 Palm Oil was introduced in Pakistan and it was my privilege that the Palm Oil negotiations were done by me on behalf of PVMA and we bought the first parcel of Palm Oil with a quantity of 5,000 MT from a firm called Socfin through a big brokerage firm called Marpro. The Chief Executive of Marpro was Mr. Sam Marshall who is still in the business in Mumbai, India and other countries.

Initially, Palm Oil faced tough competition and negative propaganda from the Soybean Oil lobby for many years. However, PL-480 was stopped and the Pakistan Government had no choice but to buy cheaper Edible Oil available in the world and that was Palm Oil.

We had a unique example in PVMA buying jointly for all 26 Ghee Units before nationalization. PVMA used to open L/c on behalf of all 26 units and we were distributing oil as per their quota. In order to curtail the import, the Ministry of Industries decided to allow imports as per the capacity of each unit. In 1969 assessment of capacity was made by the Ministry of Industries which became later on controversial as many units challenged the capacity assessed by the non-technical people who were mainly bureaucrats. However, in 1971 unfortunately, all units were nationalized by Mr. Bhutto’s Government without any notice.

I am one of the witness of nationalization as I was working in one of the units at that time i.e. Burma Oil Mills and also as Chairman, PVMA. Immense hardships were witnessed after nationalization by many units as surprisingly some of the units had residence inside the factories and we had to fight to get at least residences separated. Though the Ghee Industries were nationalized, we continued our efforts on the platform of PVMA as much as possible. I visited Faisalabad, Lahore, Islamabad, Karachi and tried to make the transaction smooth for some of the units at the time of nationalization. With satisfaction I can say that with the goodwill I had in the Ministry of Industries and the regime, I tried to solve the matters of every unit to the best of my ability.

This was the turning point in the Industry and Ghee Corporation of Pakistan was formed and I was asked by the Government through their advisor to head the Ghee Corporation in 1971 which had head office in Lahore. I politely declined and suggested the name of Mr. Habib ur Rehman then Chairman of Lever Brothers at that time producing DALDA. He took over but did not last for long and then the Government started having a Managing Director / CEO from bureaucracy. After de-nationalization and subsequent to allowing import in the private sector, Industry has seen tremendous growth.

Pakistan Edible Oil / Oilseed Industry is now one of the largest Industries. There is tremendous growth in our per capita consumption which is reflected in the table.

From the above Table one can observe that demand for 250 million people is estimated to be around 4.50 million tons and the production of indigenous oil is very small thus the Country have to rely on the import of Edible Oils and Oilseeds to cater the total consumption which is indeed huge strain on the foreign exchange bill.

It is therefore imperative that the palm oil cultivation may be encouraged, rekindling hope for a cut in the import bills of edible oil after the crop’s commercial production. The Sindh government is planning to promote palm oil plantations to increase the local production of edible oil.

Sindh Coastal Development Authority (SCDA) has collaborated with Malaysia-based firms to promote local palm oil production. The Malaysian firms are sharing production technology, agriculture experts for palm oil cultivation, along the coastal belt. This will not only make the area green but will also help in minimizing environmental pollution.

However, this will take time to reach up to the required quantum as at the very same time the experts are of an idea that in Pakistan the yield is low. The reason is that local farmers do not have expertise for crop management. Marketing will also be a major issue. Farm fruits are perishable and could deteriorate in an open area. Lack of storage and grading and inadequate transportation affect palm oil cultivation in the province. However, it should be our prime preference as this is going to help in self-sufficiency with saving of huge and valuable foreign exchange for the Country. We may also cultivate other crops like Sunflower and Rapeseeds which are most suited to our weather and soil.

My conclusion about self-sufficiency is not very bright unless Industry changes its attitude on dependency on import as the Government of Pakistan cannot afford spending huge foreign exchange. Therefore, Industry should make more efforts and allocate funds jointly or separately for the development of growing seeds in Pakistan. I would further suggest that all Industries must create special departments in their units for growing more oilseeds.

With the experience of over fifty years in this Industry, I must conclude that industry must revolutionize and support growing more local seed and control its quality. We must find ways and innovation in packaging is also very important. The Edible Oil Industry has now become a multibillion investment and it's time to come up to the expectation of the Government and the consumers by implementing the program as suggested.

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Edible Oil Scenario

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Per Capita Consumption Around 19 kgs

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Total Consumption Around 4.50 Million Tons

Local Production Around 0.50 Million Tons

Import of Edible Oils Around 3.0 Million Tons

Import of Oilseeds Around 2.00 Million Tons

Oil Extracted from Around 0.80 Million Tons

Imported Seeds

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