Prices of ghee and branded cooking oil in Pakistan rose by up to Rs 100 per kg/litre, to Rs 570, despite a global decline in palm oil costs according to a report by dawn.
said a retailer dawn The price of branded ghee and cooking oil rose by Rs 80 per kg/litre to Rs 570. The hike is up to Rs 100 per kg/litre in some major brands, he added.
President of Pakistan Vanaspati Manufacturers Association (PVMA) Sheikh Omar Rehan explained the disparity to dawnPointing out that palm oil prices, which rose in the global market to $1,285 per ton, later stabilized at $1,185, which led to a decrease in the price of palm oil in the open market to 16,500 rupees per pound from 19,000 rupees.
As a result, prices of ghee and cooking oil, which rose by Rs 80 per kg/litre, were seen reduced by Rs 40 by small and medium scale enterprises (SMEs), which hold a significant market share.
According to Rayhan, branded products, which make up only 5% of the market, take longer to adjust prices due to logistical factors such as printing, distribution and marketing. He stressed that the prices of brands are expected to decrease gradually.
Pakistan imports 90% of its palm oil needs from Indonesia and 10% from Malaysia, and its annual consumption amounts to five million tons. In the first five months of FY24, palm oil imports rose to 1,319 million tonnes ($1.26 billion), compared to 1,248 million tonnes ($1.17 billion) in the same period last year. The average price per ton rose to US$954 from US$941 in the above-mentioned period.
A delegation of PVMA members met with Malaysian Consul General Herman Hardinata bin Ahmad on Thursday. At the meeting, PVMA members requested a reduction in export duties on Malaysian palm oil to Pakistan. Rayhan stressed that such concessions would enhance trade between the two countries under the Free Trade Agreement (FTA).
Pakistan is offering a 15% tariff concession under the FTA, but Malaysia is not reciprocating a similar exemption on Pakistani exports. He urged the Malaysian government to offer similar concessions to boost trade and cooperation.
The Malaysian Consul General confirmed that Malaysia would review the proposal and expressed interest in cooperating with PVMA on palm oil plantation projects in Sindh to support the local palm oil industry in Pakistan.