By Azeem Ahmed Khan

Pakistan plans a major expansion of domestic oilseed production to substitute $7.611 billion in annual imports by 2035-36, as the country seeks to reduce its heavy dependence on imported edible oils and oilseeds.

According to an official document available with Wealth Pakistan, Pakistan's combined import bill for edible oils and oilseeds stands at $5.866 billion, ranking second after petroleum. Edible oil imports have increased from just 0.120 million tonnes in the 1970s to 4.524 million tonnes.

Without policy intervention, the document warns, edible oil imports could rise to 7.25 million tonnes, costing around $10 billion annually over the next 10 years.

Per-capita consumption of edible oils is also expected to rise to 25kg annually over the next decade from the current 19kg. Pakistan consumed only 6kg per capita annually up to the end of the 1970s.

To address the growing import dependence, a draft National Oilseed Policy has been finalised following consultations with stakeholders from the oilseed sector, academia, research and development organisations, relevant ministries and provinces.

The policy seeks to expand domestic oilseed production, increase cultivation area, improve productivity, develop new lands and strengthen research and development. It also proposes rationalising customs duties on edible oil and oilseed imports.

Under its long-term plan, annual import substitution is projected to reach $7.611 billion, or Rs2.131 trillion, by 2035-36. Annual edible oil production is expected to increase to 4.578 million tonnes, while total investment of Rs666 billion would be required over 10 years.

The plan envisages bringing 4.6 million acres under oilseed cultivation, mainly by utilising existing fallow and culturable waste lands.

The policy proposes a Profitable Intervention Price for sunflower, canola, rapeseed and mustard, soybean and sesame equivalent to 1.25 times the cost of production to encourage farmers to grow oilseed crops.

It also calls for regulatory duties on imports of edible oils and oilseeds, if required, to ensure the proposed intervention price and protect domestic growers.

For uninterrupted financing of research, development and promotional activities, the policy proposes revising the existing cess structure from Rs50 per tonne on imported edible oils and 10% of customs duty on oilseeds to 5% of C&F prices of edible oils, 3% on soybean and 1% on other oilseeds.

The strategy also sets substantial near- and medium-term targets. Under the two-year plan, oilseed acreage is proposed to increase from 1.240 million hectares to 1.574 million hectares, while annual edible oil production is projected to rise from 0.801 million tonnes to 1.391 million tonnes by 2027-28.

This phase would require Rs39 billion in investment and is projected to generate annual import substitution of $2.276 billion, or Rs637 billion.

Under the five-year plan, annual import substitution is projected to reach $3.453 billion, or Rs966 billion, by 2030-31, with edible oil production rising to 2.245 million tonnes and oilseed cultivation expanding to 2.386 million hectares. The investment requirement for this phase is estimated at Rs151 billion.

The policy identifies insufficient attention to oilseed-sector development, diminishing research capacity, low crop yields and government support favouring other crops as key factors behind Pakistan's growing dependence on imported edible oils and oilseeds.

Credit: INP-WealthPk