KARACHI: The Pakistan Vanaspati Manufacturers Association (PVMA) has urged the government to retain vegetable ghee, cooking oil and other edible oils (raw material) in the negative list while granting Non-Discriminatory Market Access (NDMA) to India.
PVMA Chairman Shaikh Abdul Razzak is scheduled to take up of the issue with Federal Minister for Commerce Khurram Dastagir on Tuesday (today). He will convey the association’s view on trade with India along with other stakeholders from agriculture sector.
The association in its working paper, sent to the Commerce Ministry, said that Pakistan imports around 2.1 million tonnes of palm oil products worth $1.8bn from Indonesia and Malaysia for domestic consumption of around 3.2m tonnes of ghee and cooking oil annually. Preferential Trade Agreements (PTAs) were signed with both the countries to promote exports.
Both India and Pakistan are highly dependent on import of palm oil of 6.828 and 2.010 million tonnes, respectively, from Indonesia and Malaysia.
Import price and freight rates for India are comparatively less as compared to Pakistan, leaving Pakistani products uncompetitive, especially if the NDMA status was granted to India.
In India, the cumulative duty and taxes on import of edible stands between zero and 10pc against in Pakistan which is as high as 32 to 35pc. It is to be noted that the sectors contributes to national exchequer around Rs120 billion per annum on end products.
The association apprehended that ghee and cooking oil were put in the positive list, the government would suffer huge short-fall in revenue and has to find a substitute by imposing duty and taxes on other items.
It is to be noted that the FBR includes vegetable ghee/cooking oil industry among in top five revenue generating sectors.
Pakistan is unable to provide subsidies to its agriculture sector because of multi-lateral constraints on government in addition to harsh conditions slapped by numerous lenders, including IMF demanding gradual removal of all kinds of subsides.
