KARACHI:
National and international speakers have highlighted that consumer countries, such as Pakistan, grapple with significant economic challenges, including high inflation, currency volatility, and geopolitical tensions in the Black Sea and the Middle East. These observations surfaced during the “6th Pakistan Edible Oil Conference (PEOC)” held at a local hotel on Saturday.
Discussing market dynamics, speakers noted that due to subdued Chinese demand and sluggish destination markets, many shippers resorted to selling their consignments at desperate prices, potentially overshooting quantities. This oversupply led to a glut in destination markets, particularly affecting Pakistan and India until November. The forecast for the markets indicates ongoing challenges in demand generation, with Malaysia and Indonesia entering low production phases that could either stabilise or improve prices as stocks decrease.
Commending the PEOC chief executive for uniting industry stakeholders at the conference, Federal Caretaker Minister for Commerce and Industries Dr Gohar Ejaz urged industrialists to play a pivotal role in strengthening the economy. He stressed that the government’s role is that of a facilitator, ensuring necessary facilities for industrialists. Ejaz encouraged industrialists to establish research centers, plan strategically, and instill belief in their business, acknowledging their significant role in the industry. Expressing serious concerns, he also addressed the country’s economic situation.
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Speaking about global challenges, Abdul Rasheed JanMohammad, CEO of Westbury Group, President of Bin Qasim Association of Trade and Industry (BQATI), and CEO of PEOC, highlighted economic challenges faced by consumer countries like Pakistan. These challenges include high inflation, currency volatility, a 5.5% increase in FED rates during 2023, monetary tightening to curb liquidity and reduce inflation, leading to a bear market, and geopolitical tensions in the Black Sea and the Middle East.
JanMohammad provided insights into Pakistan’s edible oil scenario, outlining per capita consumption (20kgs), total consumption (4.5 million tonnes), local production (0.75 million tonnes), and imports of edible oils (3 million tonnes) and oilseeds (2 million tonnes). He pointed out that Pakistan faced obstacles in capitalising on the low prices of sunflower oil and rapeseed oil due to high import duties compared to soybean oil. He also highlighted the import distribution of palm oil products between Indonesia (90%) and Malaysia (10%) over the past three years.
Mohammad Fadhil Hasan, Head of Foreign Affairs at the Indonesian Palm Oil Association (GAPKI) in Indonesia, discussed the stagnant production of palm oil over the last four years, with expectations of higher production in the current year. Hasan identified key variables impacting performance, including climate change, global economic situations, energy transitions, and geopolitical factors like the Israel-Palestine conflict and Black Sea tensions.
Published in The Express Tribune, January 14th, 2024.
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