The Hindu Business Line : Pak keen on buying Indian machinery for edible oil refineries

Pakistan would like to take India's help for setting up the refineries and has drawn a lesson from India in going in for value-addition of edible oils.

Mumbai , Sept. 26

PAKISTAN is keen to buy edible oil refinery machinery from India as part of its efforts to build refinery capacity.

It could also look at buying rapeseed (mustard) from New Delhi, provided the prices are competitive, a Pakistan industry official has said.

"Currently, we are increasing our edible oil refining capacity and are setting up refineries to process crude palm oil in Port Kasim. For this, we would like to buy machinery from India, which is cheap and of good quality. But our Government does not allow the import of the machinery directly from India," said Mr A. Rasheed Janmohammed, Chairman, Pakistan Shippers Council. He is also the Director of Westbury Group, which deals with oil indenting and sugar. He was here in connection with the two-day Globoil conference that ended on Sunday.

Pakistan would like to take India's help for setting up the refineries and, in fact, has drawn a lesson from India in going in for value-addition of edible oils.

Islamabad annually imports 1.5 million tonnes (mt) of edible oil to meet its requirement. Of this, 1.3 mt is palm group of oils with RBD palmolein accounting for one mt. "But we expect more changes in the pattern of oil imports as more refineries are coming up. By January 2006, we should have a capacity to refine 0.6 mt of crude palm oil (CPO) and by 2007, our CPO imports should touch one mt," Mr Janmohammed said.

This, he said, would help Pakistan in saving $35 a tonne for every tonne of CPO being imported. Pakistan has a uniform Customs duty of around 60 per cent on all edible oil imports. Currently, CPO for October delivery is quoted at $384 a tonne, while RBD palmolein is ruling at $415. "Our machinery imports for the refining units come from Malaysia and Germany. Of course, Indian machinery finds its way from Dubai. But direct imports would be better," he said. Pakistan's total edible oil demand is 2.5 mt and besides the edible oil import, the rest is met through cottonseed oil and import of oilseeds, mainly rapeseed from Canada, Australia and Europe.

"For the last two years, we have had good cotton crop. Therefore, 0.6 mt of cottonseed oil has been available for domestic consumption. The rest is met through rapeseed import," Mr Janmohammed said.

Asked if Pakistan would look at importing rapeseed from India, he said he was surprised to hear that India had 0.2 mt rapeseed stocks.

The stocks are current with National Agricultural Cooperative Marketing Federation (Nafed), which procured it directly from the growers during the rabi harvest as part of its market intervention operation.

Nafed purchased rapeseed at Rs 1,700 a quintal, the minimum support price fixed by the Centre. "I don't think our Government will have any problem with rapeseed import from India. But the prices have to be competitive. Currently, we import rapeseed at $285 a tonne c&f," Mr Janmohammed said. This works to around Rs 12,500 a tonne in terms of Indian rupee.

On Monday, rapeseed prices were at Rs 4,280 a quintal.

Last year, Pakistan had exported 0.2 mt of molasses to India. "But since there was problem with the implementation of the programme to mix ethanol in petrol in India, the imports have stopped. This year, since India has a good sugarcane crop, exports of molasses is unlikely from our country," he said.

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