Prices of branded ghee and cooking oil in Pakistan have surged by up to Rs100 per kilogram/litre, reaching Rs570, despite a global decline in palm oil costs as per a report by Dawn.
A retailer told Dawn the price of branded ghee and cooking oil has increased by Rs80 per kg/litre to Rs570. He added that the hike is up to Rs100 per kg/litre in some big brands.
Pakistan Vanaspati Manufacturers Association (PVMA) Chairman Sheikh Umer Rehan explained the disparity to Dawn, noting that palm oil prices, which had increased in the world market to $1,285 per tonne, have later settled to $1,185, thus bringing down the palm oil rate in the open market to Rs16,500 per maund from Rs19,000.
Consequently, prices of ghee and cooking oil, which had risen by Rs80 per kg/litre, witnessed a drop of Rs40 by small and medium-sized players, which hold major market share.
As per Rehan, branded products, which constitute only 5% of the market, take longer to adjust prices due to logistical factors like printing, distribution, and marketing. He assured that branded prices are expected to drop gradually.
Pakistan imports 90% of its palm oil from Indonesia and 10% from Malaysia, with an annual consumption of five million tonnes. In the first five months of FY24, palm oil imports rose to 1.319 million tonnes, valued at $1.26 billion, compared to 1.248 million tonnes ($1.17 billion) in the same period last year. The average per tonne price (ATP) rose to $954 from $941 in the above period.
A delegtation of PVMA members met Malaysia Consul General Herman Hardynata bin Ahmed on Thursday. In the meeting, PVMA members requested a reduction in export duties on Malaysian palm oil to Pakistan. Rehan emphasized that such concessions would enhance trade between the two countries under the Free Trade Agreement (FTA).
Pakistan offers a 15%-duty concession under the FTA, but Malaysia does not reciprocate a similar waiver on Pakistan’s exports. He urged the Malaysian government to provide a similar concession to foster trade and cooperation.
The Malaysian Consul General assured that Malaysia would review the proposal and expressed interest in collaborating with PVMA on palm oil plantation projects in Sindh to bolster Pakistan’s domestic palm oil industry.
