Pakistan Oilseeds and Products Update June 2013
Report Highlights:
Cotton is Pakistan’s principal oilseed and sowing is lagging due to water shortages and a late wheat harvest. Oilseed imports are on a downward trend due to relatively higher prices compared to palm oil. During January - May 2013, Pakistan imported 266,269 metric tons (MT) of oilseeds, a 35 percent decrease from the same period in 2012. Meanwhile, palm oil imports for January- May 2013 increased 25 percent over the same period last year.
Author Defined:
Cotton Planting in Progress
Planting of the 2013-14 cotton crop is underway in both Punjab and Sindh, however, field reports reveal that the overall planting rate is 7-10 percent behind where it needs to be to meet the Government’s target of 3.1 million hectares (ha). The reduction in planted area in Punjab and Sindh is
mainly due to a prolonged winter that delayed the wheat harvest, and affected water availability in the core cotton growing belt. Water levels in the irrigation systems have suffered due to a reduction in river flows caused by a slower-than-usual glacier melt. To add to the water problem, farmers are unable to pump sufficient water from tube wells due to severe power shortages. Progressive farmers have also altered their planting decisions, shying away from cotton due to prevailing low prices and moving toward more profitable crops such as corn, rice, and sugarcane.
Oilseeds and Edible Oil Import Matrix
Oilseed imports are decreasing due to the relatively high prices of sunflower seed and rapeseed compared to declining palm oil prices in international markets. Consequently, edible oil imports, especially palm oil, are increasing as crushers find it uneconomical to crush imported sunflower and rapeseed to supply local vegetable oil markets. This can be illustrated by comparing 2012/13 and 2011/12 prices, which depict that while rapeseed prices remained stable at around $616/MT, palm oil prices decreased by 22 percent from $1,032 to $802 /MT. Pakistani rapeseed imports during the period January - May 2013 were 266,269 tons or 35 percent lower than imports from the same period last year, whereas palm oil imports increased 25 percent to 922,804 MT.
