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Edible oil crisis in Pakistan.

Edible Oil Crisis in Pakistan

Despite several efforts to cut down the import of edible oil, success is far away in this regard. Imports have increased in terms of quantity from 858,750 tonnes in 1988-89 to 917,000 tonnes in 1989-90. The import bill on this account has however decreased from $438.11 million in 1988-89 to $372.60 million in 1989-90, due to fall in the edible oil prices from $510.17 per metric tonne to $438.11 per metric tonne. The import bill in 1990-91 is likely to touch $400 million due to price increase in the international market. There are strong indications that the edible oil price may go up. The target of the Sixth Plan was fixed at 2853 thousand tonnes against which the production of seed stood at 2,167 thousands tonnes which means 20.5 per cent behind the target.

As it has become imperative to save foreign exchange, Pakistan must accelerate its efforts to increase edible oil seed production. Cotton seed oil at present the only substantial contributor to the total production of edible oil. The production of edible oil from cotton seed in 1988-89 is estimated at 237,250 tonnes. Production fluctuates. Moreover, cotton is cultivated for fibre and not for oil seed and its yield if only cotton seed is taken into account is far less (only 13%) as compared to other oil seed crop. The bulk of production of cotton seed is from Punjab and Sindh. Yields are low mainly because of problems associated with waterlogging and salinity, practice of sowing mixed seed and minimum pest control method.

Government policy in regard to edible oil seeds is not very clear. It set up an Edible Oil Corporation but disbanded it before it could do any useful work. All it did was an introductory work on some oil seed crops. In 1988, the Government with the cooperation of the World Bank set up project under the name National Oilseed Development Project (NODP). This project came into operation from July 1988. Under this project production of non-traditional oilseeds is estimated to rise to 531,000 tonnes from 348,000 hectares producing 164,000 tonnes of edible oil and 227,000 tonnes of solvent extracted meal for poultry and livestock. According to the phrasing of the project sunflowers will occupy an areas of 259,000 hectares at the end of the project period, followed by soyabean 47,000 ha. and safflower 42,000 ha. Out of the total area to be brought under non-traditional oilseeds, 75 per cent will be under sunflowr, 13 per cent under soyabean and 12 per cent under safflower. The project also includes plan to expand the production of traditional oilseed crops like rapeseed and mustard through adoption of improved production technologies, varieties and credit facilities. It is estimated to obtain an additional 45,000 tonnes of edible oil from this source.

As per the Report of National Commission on Agriculture demand of edible oil is expected to grow to 4.4 per cent and production of edible oil is likely to grow by 7.3 per cent, during the period 1988-2000. On these targets the country would be able to reduce imports to a ratio of 50 per cent of domestic consumption by they year 2000 as given the table. The gap between the growing demand and the expected production is too large to be bridged in the next 12 years. The increasing demand is to be achieved through appropriated price policies, it might be possible to aim at about 50 per cent self-sufficiency by the year 2000. A critical element in this strategy will be gradual increase in consumer price of vegetable ghee, to divert the edible oil industry from imports to the use of domestic oilseeds.
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Publication:Economic Review
Date:Oct 1, 1990
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