Report Highlights:

Pakistan continues to expand its imports of soybeans, importing over 500,000 metric tons in 2014/15 (a record), with projected 2015/16 imports of 1.5 million metric tons. In addition to a tariff that now favors soybean imports over soymeal imports, a growing and modernizing domestic poultry sector, lower rapeseed imports, lower cotton production, and adequate crushing capacity are expected to support larger soybean imports. Imports of soybean meal are expected to drop from 1.0 million metric tons to 700,000 metric tons in 2015/16.

Soybean Imports Set to Rise

Pakistan appears to be on its way to altering its import mix of oilseeds and meals. The increase in the import tariff on soybean meal from zero to 11 percent during the last year and 10 percent this year, leading to a total 21 percent effective from July 1, 2015 is generally expected to reduce soybean meal imports with higher imports of soybeans. Surprisingly, despite the higher tariff, exports of soybean meal to Pakistan were stronger than expected, rising to just over 1.0 million metric tons (MMT) 2014/15 (See PSD Soybean Meal). To some degree, stronger than expected post-July imports were due to pre-existing forward purchases and import contracts. Exports of soybeans to Pakistan reached a record 540,000 metric tons (MT) in 2014/15 according to exporter data (See PSD Soybean).

Looking forward, the ratio of soybean meal to soybean imports is expected to continue to tilt in favor of soybeans. Importers are lining up their supplies for 2015/16 and have reportedly contracted for at least 500,000 MT of soybeans for the first six months of the marketing year. At this stage, it does not appear that deals have been struck for 2015/16 soybean meal from the Western Hemisphere. There is always potential for soybean meal imports from India. Much will depend on the relative advantages of lower freight costs, shorter shipping times, and smaller shipments from nearby India. Importers and feed compounders have much to consider when weighing the price benefits of soybeans vs. soybean meal and India vs. Western Hemisphere suppliers. However, as long as the current duty structure is in place, soybeans are expected to comprise an increasingly large share of soy complex imports. Lower 2015/16 cotton production is also expected to support additional imports of soybeans.

Pakistan is also expected to export a small quantity of soybean meal in 2015/16. Currently, sources suggest that Sri Lanka may become a customer for soybean meal produced in Pakistan.

Other Oilseeds

Total supplies of rapeseed and sunflower seed are lower than currently estimated, chiefly because production is estimated below current USDA estimates. Lower production of these two oilseeds, coupled with slight reductions in imports in 2014/15, suggest that supplies of oilseed meals from these crops are well below previous estimates, lending additional support for increased demand for soybeans. Additionally, favorable palm oil pricing is expected to curb demand for rapeseed given its high oil content and less efficacious meal. Purchases of rapeseed through the first four months of the 2015/16 marketing year are estimated at 150,000 metric tons.

What's the deal with crushing capacity?

As FAS Islamabad has reported previously, Pakistan has ample capacity to handle additional imports of soybeans. Total crushing capacity is estimated at 10.0 MMT with an estimated 4.5 MMT of modern crushing capacity. True, much of Pakistan's crushing industry is comprised of relatively small plants that crush cottonseed, Pakistan's largest domestic oilseed crop. However, there is a sizeable and underutilized sector that is comprised of larger more modern plants, many of which are either located near Karachi or near the heart of the poultry sector. The increase in the tariff in soybean meal was designed, in large part, to expand throughput in the crushing sector by increasing imports of soybeans. In short, we do not believe that crushing capacity or the location of crushing plants limits our projected 2015/16 import volume. How high would soybean imports have to go to reach a point where crushing capacity becomes a concern? That's hard to say, but 3.0 MMT looks to be a level where we would start to look more closely at the issue.

Oilseed, Rapeseed

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2015

Pakistan

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Planted

360

210

360

250

360

200

Area Harvested

360

210

350

250

350

200

Beginning Stocks

40

40

90

90

90

60

Production

320

190

300

220

300

160

MY Imports

930

930

925

800

825

500

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

142

0

0

0

0

0

Total Supply

1290

1160

1315

1110

1215

720

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Crush

1150

1030

1175

1000

1075

650

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

50

40

50

50

50

70

Total Dom. Cons.

1200

1070

1225

1050

1125

720

Ending Stocks

90

90

90

60

90

0

Total Distribution

1290

1160

1315

1110

1215

720

Oilseed, Sunflowerseed

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2015

Pakistan

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Planted

0

0

0

0

0

0

Area Harvested

400

160

360

160

340

150

Beginning Stocks

14

14

11

11

11

10

Production

600

200

540

200

510

190

MY Imports

197

197

178

178

140

140

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

811

411

729

389

661

340

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Crush

770

390

700

370

630

320

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

30

10

18

9

20

10

Total Dom. Cons.

800

400

718

379

650

330

Ending Stocks

11

11

11

10

11

10

Total Distribution

811

411

729

389

661

340

Oilseed, Soybean

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2015

Pakistan

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Planted

2

2

2

2

2

2

Area Harvested

2

2

2

2

2

2

Beginning Stocks

0

0

0

0

0

0

Production

2

2

2

2

2

2

MY Imports

11

0

350

540

850

1500

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

13

2

352

542

852

1502

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Crush

11

0

350

540

850

1500

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

2

2

2

2

2

2

Total Dom. Cons.

13

2

352

542

852

1502

Ending Stocks

0

0

0

0

0

0

Total Distribution

13

2

352

542

852

1502

Meal, Rapeseed

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2014

Pakistan

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Crush

1150

1030

1175

1000

1075

650

Extr. Rate, 999.9999

0.587

0.5825

0.5872

0.58

0.586

0.5846

Beginning Stocks

0

0

0

0

0

0

Production

675

600

690

580

630

380

MY Imports

75

75

5

5

10

10

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

750

675

695

585

640

390

MY Exports

211

100

5

5

10

10

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

539

575

690

580

630

380

Total Dom. Cons.

539

575

690

580

630

380

Ending Stocks

0

0

0

0

0

0

Total Distribution

750

675

695

585

640

390

Meal, Sunflowerseed

2013/2014

2014/2015

2014/2015

Market Begin Year

Oct 2013

Oct 2014

Oct 2014

Pakistan

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Crush

770

390

700

370

630

320

Extr. Rate, 999.9999

0.4182

0.4103

0.4143

0.4189

0.4175

0.4219

Beginning Stocks

0

0

0

0

0

0

Production

322

160

290

155

263

135

MY Imports

0

0

0

0

0

0

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

322

160

290

155

263

135

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

322

160

290

155

263

135

Total Dom. Cons.

322

160

290

155

263

135

Ending Stocks

0

0

0

0

0

0

Total Distribution

322

160

290

155

263

135

Meal, Soybean

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2015

Pakistan

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Crush

11

0

350

540

850

1500

Extr. Rate, 999.9999

0.7273

0

0.7714

0.7778

0.7718

0.78

Beginning Stocks

50

50

50

50

50

200

Production

8

8

270

420

656

1170

MY Imports

924

924

1000

1030

1000

700

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

982

982

1320

1500

1706

2070

MY Exports

0

0

0

0

0

100

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

932

932

1270

1300

1656

1770

Total Dom. Cons.

932

932

1270

1300

1656

1770

Ending Stocks

50

50

50

200

50

200