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Pakistan second largest importer of Malaysian palm oil.

The palm oil industry has developed into a very vital agriculture-based industry in Malaysia. Malaysia is the largest producing and exporting country of palm oil of the world. The growth of palm oil industry in Malaysia spreads over four decades. Though oil palm tree cultivation was introduced in 1870, but its commercial production started in 1960s. The Malaysian palm oil industry started growing in 1970s. There are now over 40 refineries with a total installed capacity of over 8.87 million tonnes. The number of mills has grown to 217.

For many years, Pakistan has been a major importer and consumer of Malaysian palm oil. From 1988 to 1993, Pakistan imported from 1,100,000 tonnes to 1,540,000 tonnes palm oil. Pakistan was the largest importer in 1993, importing 1.5 million tonnes but it fell down by 20 per cent in 1994-95. In 1994 China was the largest importer of Malaysian palm oil, importing 1.34 million tonnes and Pakistan was second with 1.1 4 million tonnes. Malaysian palm oil accounts for about 51 per cent of Pakistan's imports which is equivalent to about 15 per cent of Malaysia's production and 18 per cent of its total exports.

In addition to Pakistan, Malaysian Palm Oil Promotion Council (MPOPC) also exports palm oil to over 90 countries throughout the world. In 1994, Malaysia produced a total of 7.2 million tonnes of palm oil which is over 52 per cent of total world production and exported over 6.65 million tonnes which is valued at over 9 billion Malaysian ringgit ($ 4.56 billion). Palm Oil contributes over 38 per cent of world trade in oils and fats and Malaysian palm oil plays a major role.

Future Prospects

By the year 2000 palm oil production in Malaysia is expected to reach 17.5 million tonnes annually and exports to reach 14.4 million tonnes. To minimise the risks of volatile price fluctuations in the market, the Kuala Lumpur Commodity Exchange has offered hedge trading facility in crude palm oil futures market to Pakistan's ghee manufacturers. A team of KLCE is now on a visit of Pakistan with a view to create and educate importers about the Malaysian palm oil.

Pakistani importers, according to the head of KLCE team, have great potential for hedge trading, being the largest consumer of palm oil, especially while more and more ghee manufacturers were switching over to palm oil as raw material. The team predicted that Malaysian palm oil exports to Pakistan would again cross the figure of one million. The Malaysian Palm Oil Promotion Council also wants to focus its activities on the general consumers. The consumers are not aware of the benefits of palm oil. This is because they are not aware that they are consuming palm oil because manufacturers do not put palm oil on their labels. This is because there is general uneasiness amongst manufacturers to put palm oil on the labels. They are afraid that this would frighten the consumers and affect their sales.

Forth is purpose, MPOPC is undertaking several promotional activities that are focused on general consumers. In addition, the MPOPC is also organising Malaysian Palm Oil Awareness Programme for chief executives and government officials and also for journalists. Through this programme participants will be given the opportunity to have first hand experience on the Malaysian palm oil industry and also participate in discussions which hope fully would make them understand better what palm oil is.

The council is also organising talks on palm oil for different target groups. This is to ensure that the information about palm oil is disseminated as widely as possible. Palm Oil is naturally endowed with high quality carotenoids and tocotrienols (vitamin E). It is also widely used in pharmaceutical industry. Studies show that carotenoids in humans possess antioxidants properties and may protect against certain type of cancer and safeguards against various ailments of skin, bronchi, trachea, stomach, intestine, uterus, eyes and kidney. Tocotrienols prevents oxidation to polyunsaturated fatty acid units of plasma membrane of cells and also prevents cataract formation and delays the onset of various degenerative diseases such as aging, cancer, arthritis, coronary heart diseases. This also works against injury to cells caused by air pollution.

Setting up of Offices

The Malaysian palm oil industry have established very good relationship with the Pakistan Vanaspati Manufacturer Association (PVMA), and Ghee Corporation of Pakistan (GCP). The Malaysian Palm Oil Promotion Council has organised many technical as well as nutrition seminars in Pakistan for manufacturers and scientists. Palm Oil Research Institute of Malaysia (PORIM) which ensures quality through awarding certificates of competence to refiners, has an office in Karachi and worked closely with manufacturers. In view of the very good market for Malaysian palm oil in Pakistan and with the potential to import more, coupled with the planned increase in activities, the MPOPC has established office in Lahore.
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Author:Ali, Farman
Publication:Economic Review
Article Type:Industry Overview
Date:Jan 1, 1996
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