As traders failed to get Letters of Credit (LCs) in the face of dollar crunch, there are currently three weeks’ worth of edible oil supplies in the country, it emerged on Tuesday.
As per details, over 10 ships carrying edible oil consignments remain stuck at ports in Karachi and Gwadar. “Consignments are not getting the clearance from the authorities.” Local media said.
As the eighth-largest user of edible oil, Pakistan is heavily reliant on imports. A meagre 14% of all edible oil use comes from the local market.
With effect from January 2, 2023, the State Bank of Pakistan (SBP) agreed to relax import regulations. Authorized dealers (ADs) would now be able to prioritize and assist imports based on predetermined categories.
The central bank said that ADs may prioritize or facilitate imports under essential imports, energy imports, and imports by export-oriented industry, imports for agriculture inputs, deferred payment / self-funded imports and import for export-oriented projects near completion.
These include goods which are related to essential sectors such as food (wheat, edible oil, etc) and pharmaceutical (raw material, life-saving/ essential medicines, surgical instruments including stents).
In Pakistan, nearly 90% of the import of oilseeds is constituted by palm and soybean oilseeds. In its recently released report for the first quarter of the financial year 2022, the State Bank of Pakistan included a special section on rising palm and soybean imports. According to the report, Pakistan’s palm and soybean-related imports stood at US$ 4 billion in FY21, rising by 47 percent year-on-year, compared to compound average growth of 12.3 percent in the last 20 years. The domestic reliance on soybean and palm has been steeply increasing since the turn of the century. As a result, 86 percent of domestic edible oil consumption in 2020 came from imports up from 77 percent in 2000.
