Production:

Marketing year (MY) 2015/16 (Oct-Sep) Oilseed production is forecast at 4.8 million metric tons (MMT) down from the current marketing year due to projected area declines for Pakistan's limited oilseed crops. While Pakistan is a significant importer of products within the oilseed complex, production of all oilseeds except cottonseed is minimal. Winter or "Rabi" oilseeds like rapeseed and sunflower suffer from competition from wheat. Wheat farmers enjoy a guaranteed support price for the portion of their crop that is marketed to the public sector and for those who consume their wheat on-farm or in the village (about half of the wheat crop) wheat is seen as a staple and life-sustaining crop. Sunflower can also be produced during the Kharif or summer season but corn, rice, and sugarcane are generally deemed more remunerative. Declining global oilseed prices are expected to prompt farmers to reduce area even further in 2015/16 as farmers opt for the price-supported wheat that is now priced significantly higher than the international wheat market, a price differential that is expected to hold based on current futures prices. While there have been attempts at producing soybeans, the crop has failed to catch due to the harsh summer conditions and a lack of planting seeds, despite a growing poultry and dairy sectors.

Cottonseed:

Cottonseed is the principal oilseed crop grown in Pakistan, accounting for about 90 percent of domestic oilseed production. Cotton is a key cash crop and an important input for Pakistan's textile sector, a major contributor to the country's gross domestic product. Cotton production is forecast down slightly from the revised 2014/15 estimate (based on the official cotton production estimate) and cottonseed production is similarly expected to decline marginally to 4.4 MMT in 2015/16. The province of Punjab accounts for about 75 percent of cotton production, while the province of Sindh contributes the balance of the crop.

Rapeseed:

Rapeseed is a winter or "Rabi" crop that is grown in Punjab and Sindh. Official area and production estimates for 2014/15 and 2013/14 are significantly lower than current USDA estimates. MY 2015/16 area and production are also forecast lower given the expectation that farmers will opt to plant wheat instead of rapeseed.

Sunflower seed:

According to official figures, sunflower area and production are significantly lower than the current USDA estimates for 2013/14 and 2014/15. MY 2015/16 area and production are also forecast lower due to expected competition from wheat.

Consumption:

Oilseed consumption continues to play an important role within the overall oilseed complex. However, annual consumption levels will vary depending on changing import policies and competing prices for imported oil and meal. In general, the trend in terms of demand for oilseed complex products is up as the poultry sector grows, segments of the dairy industry modernize, and investors consider modern beef production. Additionally, traditional Pakistani cooking uses large amounts of oil and consumption tends to increase as incomes improve, especially as consumers move into the middle class, a trend that continues as part of slow but steady growth in gross domestic product. Having said that, oilseed crush is forecast down at 5.2 MMT for MY 2015/16 due in part to an increase in carryover stocks of meal and a reduction in oilseed imports. Revisions to the 2013/14 and 2014/15 marketing years reflect the most recent data from the Solvent Extractors' Association. In general, the industry is in the process of upgrading its crushing capacity to improve both efficiency and quality.

Trade:

Pakistan augments its domestic oilseed production with imports. Pakistan's tariff structure is designed to facilitate oilseed imports through reduced tariffs and fees as a means of shifting value addition to the domestic industry. Tariffs on rapeseed, canola, and sunflower seed have been lower than vegetable oil tariffs since 2005. In July of 2014, the tariff on soybeans was maintained at six percent, whereas, the tariff on soybean meal was increased from zero to 11 percent, a move designed to make soybean imports more attractive than meal imports. Oilseed imports are driven by demand for both oil and meal along with crushing margins. Landed prices plus tariffs play a significant role in determining the import mix between seeds, oil, and meal.

According to data provided by the All Pakistan Solvent Extractors' Association oilseed imports during 2013/14 were 780,000 MT and 2014/15 imports are on pace to reach 1.4 MMT which may be a record based on a cursory review of historical data. Pakistan has started to import large volumes of soybeans for the first time as a result of new tariffs imposed on the import of soybean meal. The United States has sold significant quantities of soybeans to Pakistan for the first time ever. Importers are also shifting away from Indian soymeal to take advantage of competitively-priced soybeans. Rapeseed and canola continue to be the dominant oilseed imports; however, imports are expected to drop to 500,000 MT in 2015/16 as imports of soybeans increase to 400,000 MT, due in large part to the imposition of new tariff on soybean meal and higher soybean imports. Total oilseed imports for 2015/16 are forecast down at 1.1 MMT due in large part to an increase in carryover stocks of meal.

Duty Structure on Edible Oil, SBM and Oilseeds

Product

Import

Import

Import

Central

Income

Advance

Federal

General

Duty (Malaysia)

Duty

(Indonesia)

Duty

Excise Duty

Tax

.Income Tax

Excise Duty

Sales T

Palm Olein

7,743

7,743

-

16%

5%

-

1,000

-

RBDPO*

9,230

9,230

-

16%

5%

-

1,000

-

CPO*

6,850

6,850

-

16%

5%

-

1,000

-

CDSBO*

9,100

16%

5%

-

-

1,000

-

Soybeans

-

-

-

-

-

-

-

6%

SBM*

-

-

5%

1%

-

-

-

5%

Other Oilseeds

-

-

-

-

-

5%

400/MT

15%

Tariffs are in Rupees, exchange rate is $1.0 =Rs. 100

*RBDPO: Refined Bleached Deodorized Palm Oil

*CPO: Crude Palm Oil

*CDSBO: Crude Deodorized Soybean Oil

*SBM: Soybean Meal

Policy:

In an attempt to address food security concerns, Pakistan's agricultural policy is largely focused on the enhancement of wheat production; principally through a support price mechanism at which the government purchases at a minimum wheat price. The government procures about half of the wheat crop that is marketed off-farm which is generally sufficient to create a price floor in the market for wheat. As most oilseeds are Rabi or winter crops, farmers tend to opt for wheat over oilseeds. For sunflower and soybeans, two crops that could be produced during the Kharif or summer season, farmers tend to view cotton, rice, and sugarcane as more remunerative options.

In an effort to curb expenditures on imports, and enhance local oilseed production, the Pakistan Oilseed Development Board (PODB) was established in 1995. PODB's efforts have not resulted in farmers opting to plant oilseeds on a large scale. With no support price mechanism to compete with wheat, and a lack of funding to improve research, seed quality and technology are key constraints that deter farmers. Additionally, the domestic crushing industry is content to process imported seeds, provided tariffs are favorable, in lieu of taking steps to incentivize farmers to produce oilseeds.

Pakistan does not currently restrict imports of biotech oilseeds or products derived from biotech oilseeds. Nearly all of Pakistan's cottonseed oil and meal are derived from biotech cotton and products such as soybeans and canola and their products are regularly imported from countries where biotech versions of these crops are widely grown.

Production, Supply and Demand Data Statistics:

Total Oilseeds Pakistan

2013

2014

2015

2013/2014

2014/2015

2015/2016

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

3,762

3,272

3,762

3,362

0

3,302

Beginning Stocks

320

154

192

150

0

180

Production

5,022

4,492

5,242

5,022

0

4,752

MY Imports

787

780

1,260

1,380

0

1,100

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

6,129

5,426

6,694

6,552

0

6,032

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Crush

5,290

4,825

5,865

5,815

0

5,230

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

647

452

657

562

0

652

Total Dom. Cons.

5,937

5,276

6,522

6,372

0

5,882

Ending Stocks

192

150

172

180

0

150

Total Distribution

6,129

5,426

6,694

6,552

0

6,032

CY Imports

652

0

1,150

0

0

0

CY Imp. from U.S.

0

0

0

0

0

0

CY Exports

0

0

0

0

0

0

CY Exp. to U.S.

0

0

0

0

0

0

TS=TD

0

0

0

0

0

0

Oilseed, CottonseedPakistan

2013/2014

2014/2015

2015/2016

Market Year Begin: Oct 2013

Market Year Begin: Oct 2014

Market Year Begin: Oct 2015

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested (Cotton)

3,000

2,900

3,050

2,950

0

2,950

Seed to Lint Ratio

0

67

0

67

0

67

Beginning Stocks

266

100

141

100

0

100

Production

4,100

4,100

4,400

4,600

0

4,400

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

4,366

4,200

4,541

4,700

0

4,500

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Crush

3,650

3,700

3,850

4,100

0

3,800

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

575

400

575

500

0

600

Total Dom. Cons.

4,225

4,100

4,425

4,600

0

4,400

Ending Stocks

141

100

116

100

0

100

Total Distribution

4,366

4,200

4,541

4,700

0

4,500

CY Imports

0

0

0

0

0

0

CY Imp. from U.S.

0

0

0

0

0

0

CY Exports

0

0

0

0

0

0

CY Exp. to U.S.

0

0

0

0

0

0

TS=TD

0

0

0

0

0

0

Oilseed, Rapeseed Pakistan

2013/2014

2014/2015

2015/2016

Market Year Begin: Oct 2013

Market Year Begin: Oct 2014

Market Year Begin: Oct 2015

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

360

210

350

250

0

200

Beginning Stocks

40

40

40

40

0

70

Production

320

190

300

220

0

160

MY Imports

600

550

850

980

0

500

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

960

780

1,190

1,240

0

730

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Crush

870

700

1,100

1,120

0

650

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

50

40

50

50

0

40

Total Dom. Cons.

920

740

1,150

1,170

0

690

Ending Stocks

40

40

40

70

0

40

Total Distribution

960

780

1,190

1,240

0

730

CY Imports

650

0

850

0

0

0

CY Imp. from U.S.

0

0

0

0

0

0

CY Exports

0

0

0

0

0

0

CY Exp. to U.S.

0

0

0

0

0

0

TS=TD

0

0

0

0

0

0

Oilseed, Sunflowerseed Pakistan

2013/2014

2014/2015

2015/2016

Market Year Begin: Oct 2013

Market Year Begin: Oct 2014

Market Year Begin: Oct 2015

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

400

160

360

160

0

150

Beginning Stocks

14

14

11

10

0

10

Production

600

200

540

200

0

190

MY Imports

187

230

310

200

0

200

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

801

444

861

410

0

400

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Crush

770

425

815

395

0

380

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

20

10

30

10

0

10

Total Dom. Cons.

790

434

845

400

0

390

Ending Stocks

11

10

16

10

0

10

Total Distribution

801

444

861

410

0

400

CY Imports

2

0

300

0

0

0

CY Imp. from U.S.

0

0

0

0

0

0

CY Exports

0

0

0

0

0

0

CY Exp. to U.S.

0

0

0

0

0

0

Oilseed, Soybean Pakistan

2013/2014

2014/2015

2015/2016

Market Year Begin: Oct 2013

Market Year Begin: Oct 2014

Market Year Begin: Oct 2015

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

2

2

2

2

0

2

Beginning Stocks

0

0

0

0

0

0

Production

2

2

2

2

0

2

MY Imports

0

0

100

200

0

400

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

2

2

102

202

0

402

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Crush

0

0

100

200

0

400

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

2

2

2

2

0

2

Total Dom. Cons.

2

2

102

202

0

402

Ending Stocks

0

0

0

0

0

0

Total Distribution

2

2

102

202

0

402

CY Imports

0

0

0

0

0

0

CY Imp. from U.S.

0

0

0

0

0

0

CY Exports

0

0

0

0

0

0

CY Exp. to U.S.

0

0

0

0

0

0