Cooking oil prices in Pakistan’s retail market have hit a 15-month high. The surge comes on the back of rising palm oil import costs, which have pushed domestic prices higher. January 2025 saw the highest import unit price in over two years, crossing $1,130 per ton. With Ramadan around the corner, prices are expected to remain firm.
Pakistan’s palm oil import bill for July-January FY25 stands at $1.9 billion—up 17 percent year-on-year. Import quantities have also increased, averaging 270,000 tons per month, up 9 percent year-on-year. The last time import volumes were higher during this period was in FY21 when COVID-induced price drops and Afghanistan’s border situation led to excessive inflows, including through smuggling. This time, it appears more of a demand-driven surge.
Global market movements are shaping the outlook. Palm oil prices have been on the rise, but a key concern emerged when India’s January 2025 palm oil imports hit a 14-year low. India—the world’s largest palm oil buyer—is witnessing a shift in edible oil consumption. Soybean oil, once a close competitor, is now outpacing palm oil imports. Price advantage has played a key role in this shift.
The upcoming Ramadan will be a critical test for palm oil demand. Historically, demand spikes in both India and Pakistan ahead of the fasting month. If Indian demand rebounds, palm oil’s price rally could extend further. However, if soybean oil continues to eat into palm oil’s market share, the price momentum may slow. February’s trade data from India will be a key signal for the market.
For Pakistan, palm oil remains the single largest food import. In January 2025, both the quantity and value of imports hit a two-year high. Given the supply tightness and high consumption during Ramadan, spot prices are expected to stay strong. Traders remain confident in the bull run, at least in the near term.
Longer-term price stability will depend on multiple factors—Indian demand, global edible oil competition, and exchange rate movements. For now, Pakistan’s importers and consumers should brace for continued high prices.
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