Increase in palm oil import price adds to Pakistan's trade deficit woes
Increase in palm oil import prices has added to Pakistan's trade deficit woes as it tries to cope with an increase in inflation and its dependence on external loans is increasing.
Increase in palm oil import prices has added to Pakistan's trade deficit woes as it tries to cope with an increase in inflation and its dependence on external loans is increasing. Edible oil is an essential food item in Pakistan and 80-90 per cent of its total demand is met by imported palm oil from Indonesia and Malaysia, according to Daily Times.
According to the United States Department of Agriculture's (USDA) estimates, the per capita consumption of cooking oil in Pakistan is 24 kg. The imported palm oil in Pakistan is being used for making a range of goods like vanaspati ghee, chocolates, soap and various bakery items. Further, a developing country like Pakistan with a fragile economy, that too dependent on international support and International Monetary Fund (IMF) conditional programmes, has been hit in many directions.
Also, there is a soaring inflation rate and electricity is becoming more and more expensive while gas is to be rationed. The Palm Oil importers and Pakistan Vanaspati Manufacturers Association (PVMA) have been very vocal on the recent increase in the import price of edible oils, especially palm oil, in the market, according to Daily Times.
On top of that, a record increase in fuel prices has hit the common man in Pakistan from all sides making it a huge task to meet day to day expenditures with the issue of food security becoming more serious. Market sources project that the country's food import bill will go up further in the current FY 2021-22 as compared to last year. This is evident from the figures of the quarter of July-September, which went up by 66.11 per cent to USD 18.74 billion against USD 11.28 billion over the corresponding months of last year.
Edible oils import also witnessed a substantial increase both in terms of quantity and value, according to Daily Times. As per the news coming out, the negotiations between the government and industry stakeholders are still inconclusive as rupee-dollar parity increases and to rationalize the duties and taxes on the import of edible oil especially palm oil, which amounts to 90 per cent of the total imports.
The government will be forced to take steps in modifying the trade agreements signed with both Indonesia and Malaysia for preferential treatment as far as the export of palm oil to Pakistan is concerned. Unless these remedial measures are taken, the middle and lower segments of the population will remain under economic pressures with no respite. But as of now, there is not enough light at the end of the economic tunnel, according to Daily Times. (ANI)
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)