Required Report - public distribution

**Date:** 3/22/2004

**GAIN Report Number:** PK4004

PK4004

**Pakistan**

**Oilseeds and Products**

**Annual**

**2004**

**Approved by:**

Michael Henney, Regional Director![](media/image1.wmf) U.S. Consulate,
Dubai

**Prepared by:**

Ikram Chaudhary, Ag Specialist U.S. Embassy, Islamabad

**Report Highlights:**

Pakistan\'s production of oilseed, meal and oil are all expected to
increase through greater availability of land resources, stronger market
incentives and expanding demand for end-products reliant on oilseed
product inputs. To meet rising consumer demand, more imports will be
necessary. The country\'s new differential tax structure discourages
import of soybeans to the detriment of the domestic solvent industry
while encourages cross-board trade in meal from India. Ghee remains very
popular thus demand for palm oil should remain strong. U.S. concession
programs, not used for a few years now, assisted the last large import
of U.S. soybeans and products into the country.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Annual Report

Islamabad \[PK1\]

\[PK\]

> Table of Contents

[Executive Summary 3](#executive-summary)

[OILSEEDS 3](#oilseeds)

[Production 3](#production)

[Government Support 4](#government-support)

[Consumption 5](#consumption)

[Trade 5](#trade)

[Table 1: Oilseed Imports (MT) 5](#table-1-oilseed-imports-mt)

[Table 2. Total Oil seeds Production, Supply and Demand
6](#table-2.-total-oil-seeds-production-supply-and-demand)

[Table 3. Cotton seed Production, Supply and Demand
7](#table-3.-cotton-seed-production-supply-and-demand)

[Table 4: Sunflower-seed Production, Supply and Demand
8](#table-4-sunflower-seed-production-supply-and-demand)

[Table 5: Rapeseed Production, Supply and Demand
9](#table-5-rapeseed-production-supply-and-demand)

[Table 6: Soybean Production, Supply and Demand
10](#table-6-soybean-production-supply-and-demand)

[OIL MEAL 11](#oil-meal)

[Production 11](#production-1)

[Consumption 11](#consumption-1)

[Trade 11](#trade-1)

[Table 7: Total Oil Meal Production, Supply and Demand
12](#table-7-total-oil-meal-production-supply-and-demand)

[Table 8: Cottonseed Meal Production, Supply and Demand
13](#table-8-cottonseed-meal-production-supply-and-demand)

[Table 9: Sunflower-seed Meal Production, Supply and Demand
14](#table-9-sunflower-seed-meal-production-supply-and-demand)

[Table 10: Rapeseed Meal Production, Supply and Demand
15](#table-10-rapeseed-meal-production-supply-and-demand)

[Table 11: Soybean Meal Production, Supply and Demand
16](#table-11-soybean-meal-production-supply-and-demand)

[OILS 17](#oils)

[Production 17](#production-2)

[Consumption 17](#consumption-2)

[Trade 17](#trade-2)

[Table 12: Oil Tariffs and Taxes 18](#table-12-oil-tariffs-and-taxes)

[Table 13: Total Oil Production, supply and Demand
19](#table-13-total-oil-production-supply-and-demand)

[Table 14: Cottonseed Oil Production, Supply and Demand
20](#table-14-cottonseed-oil-production-supply-and-demand)

[Table 15: Sunflower-seed Oil Production, Supply and Demand
21](#table-15-sunflower-seed-oil-production-supply-and-demand)

[Table 16: Rapeseed Oil Production, Supply and Demand
22](#table-16-rapeseed-oil-production-supply-and-demand)

[Table 17: Soybean Oil Production, Supply and Demand
23](#table-17-soybean-oil-production-supply-and-demand)

[Table 18: Palm Oil Production, Supply and Demand
24](#table-18-palm-oil-production-supply-and-demand)

# Executive Summary

Pakistan is the world's third largest importer of edible oil. Edible oil
imports represent the country's second largest import expenditure after
energy resources. Oilseeds production is highlighted by the government
as an important way of saving scarce foreign exchange. Despite this
focus, efforts to increase production have not been very successful for
a number of reasons and significant increases appear unlikely for the
foreseeable future.

MY 2004/05 oilseeds production is forecast to increase 14 percent on
anticipated expansion in cottonseed and sunflower-seed planted area.
Over the past several years oilseed imports have increased sharply in
response to government policy designed to support the domestic solvent
extraction industry. This policy intent is to enable local producers to
capture the value-added benefits from local meal and oil production and,
in that way, enhance development of a viable industry necessary to
stimulate local oilseed production.

MY 2004/05 meal production is forecast to increase 12 percent due to
anticipated expansion in domestic oilseed production and higher import
of oilseeds. Local processors had been importing soybeans to satisfy
growing demand from the poultry sector. However, rising international
prices and a new 20 percent sales tax levy on oilseeds are discouraging
imports of whole beans. The inclusion rate of soybean meal in mixed feed
formulation has increased to 15 percent in response to demand for
quality feed in the poultry and livestock sectors.

In MY 2004/05 oil imports are forecast to increase 4 percent mainly due
to increasing consumption requirements. Palm oil is the main oil
imported. However, growing awareness of the unhealthiness of saturated
oil is emerging. A growing number of consumers now prefer liquid oils to
'ghee\", but remain dissuaded by price

###### 

# OILSEEDS

## Production

MY 2004/05 total oilseed production is forecast to increase, up by 14
percent over the prior year's output. The combined economic incentives
(offered for sunflower and cottonseed oil) , weather factors and
marketing problems of competitor crops necessitating conversion to
shorter season crops are spurring further acreage shift to cottonseed
and sunflower seed.

MY 2003/04 oilseeds production increased to 3.85 MMT due mainly to
increased production of cottonseed, sunflower seed and rapeseed driven
by acreage shift to those commodities for the above stated reasons as
well.

[Cottonseed:]{.underline}

Pakistan's principle oilseed crop, cottonseed, typically accounts for
about 90 percent of total domestic oilseed production. Cottonseed is
grown primarily for lint, the basic input for Pakistan's important
textile industry. Oil and meal are secondary products.

MY 2004/05 cottonseed production is forecast to increase 13 percent over
the prior year's output on strength of larger area planted resulting
from a shift from sugar cane. In recent years the turmoil besetting the
sugar cane industry has led to lower market returns to producers who, in
turn, have shifted a substantial amount of acreage to alternative crop
production.

MY 2003/04 cottonseed production increased 3 percent due mainly to
expansion in production area. However, yield levels were negatively
affected by a late-season virus (when fungicide stocks were limited) and
untimely rains in the cotton growing areas of the country, as reported
previously.

[Rapeseed:]{.underline}

Traditionally, rapeseed is produced for use in fodder (mixed with wheat)
and for oil. Rapeseed accounts for 6-8 percent of total oilseed
production. The Government's stated goal is to increase production of
canola, but has made little progress towards achieving this goal during
the last few years. Efforts to replace rapeseed and mustard seed with
high-yielding canola have not advanced substantially due to lack of good
quality seed, low farm-gate prices and problems marketing the higher
value product.

MY 2004/05 rapeseed production is forecast to increase 3 percent based
on the projected expansion in planted area and improvement in yields. As
with cottonseed, MY 2003/04 rapeseed production increased 6 percent
mainly due to expansion in production area.

[Sunflower seed:]{.underline}

MY 2004/05 sunflower seed production is forecast to increase
substantially, over 70 percent, on the basis of: (1) higher farm gate
price (Rs. 670 per 40 Kgs as offered by the solvent industry), (2)
higher price for cotton should encourage allowing plants to fully mature
before harvest. Net result is a shorter growing season for a second crop
commodity which supports sunflower seed selection, (3) lower return on
alternative crops such as wheat (farmers could only receive 80-85
percent of the government's support price).

MY 2003/04 sunflower seed production increased over 70 percent above the
previous harvest, one that had been adversely affected by a large shift
to wheat and vegetable production in response to stronger market prices.

## Government Support 

Oilseed production is encouraged through a support price mechanism
designed to generate a higher farm-gate price with no government
procurement. Several years back the then Military government, under a
commitment to the Asian Development Bank (ADB), shifted public policy
from one of direct price support to one of infrastructure development
(i.e., production technology, procurement and market infrastructure).
The current government reintroduced the Minimum Guaranteed Price System
for major crops, justifying is policy shift as a safeguard measure in
the event market prices decline to steeply.

Rather than view as a competitor, some officials are realizing that
oilseed imports are necessary to spur development of a viable processing
industry, thus stimulate demand for local oilseed. Some officials
increasingly appear to believe that large oil imports--not oilseed
imports\--constrain development of a viable domestic processing
industry, the catalyst for increasing domestic oilseed production.
However, their view is not widely supported as evidenced by the current
tax policy. In MY 2004/05, the solvent extraction industry, in
collaboration with seed companies, announced a minimum purchase price
from farmers for domestic oilseeds, an action likely to spur cultivation
of oilseeds in the country. In previous years, the solvent industry is
known to have paid a 10-15 percent premium above the announced minimum
purchase price.

## Consumption

Pakistan's crushing industry consists of older, inefficient
single-function facilities along with newer solvent extraction plants.
Industry capacity is estimated at 5 MMT, with older plants holding 3.5
MMT and newer plants holding 1.5 MMT. During the 1990's the solvent
extract industry was estimated to have been operating at below 50
percent of installed capacity. With raw material more readily
availability thru importation, the solvent industry is now operating at
an estimated 75 - 80 percent of installed capacity.

## Trade

MY 2004/05 oilseed trade is forecast to expand 6 percent as crushing
margins improve with recent changes to the import duty structure.
Imports are expected to consist of: rapeseed/canola (550,000 MT),
sunflower seed (250,000 MT) and soybeans (50,000 MT). In June 2003, the
GOP exempted all oilseeds from custom duty but imposed a 20 percent
sales tax. This action encouraged import of rapeseed and sunflower seed
over soybeans because the sales tax applied for the meal by-product
differed by commodity. All vegetable oils are assessed a flat 15 percent
sales tax. In recent years, U.S. soybeans have entered the market under
the U.S. PL-480 and 416(b) programs.

MY 2003/04 oilseed imports increased 12 percent due mainly to lower
tariffs on oilseed and higher tariffs on meal and oil which influenced
crush margins significantly. Changes allowed the industry (and the
economy) to capture the value-added benefits from local crush, mainly at
the expense of imported Indian soybean meal and palm oil.
Rapeseed/canola seeds are sourced primarily from Canada and Australia
while sunflower-seed arrives from the Ukraine and Russia.

### Table 1: Oilseed Imports (MT)

  ------------------ ----------------- ----------------- -----------------
  Commodity          MY 2002/03        MY 2003/04        MY 2004/05

  Canola/rapeseed    461,000           500,000           550,000

  Sunflower seed     88,000            250,000           250,000

  Soybeans           170,000           50,000            50,000

  Total              719,000           800,000           850,000
  ------------------ ----------------- ----------------- -----------------

### Table 2. Total Oil seeds Production, Supply and Demand

  --------------------- ------------ ------------- -------- ------------- ------- -------------
  **Commodity:**        **TOTAL                                                   
                        OILSEEDS**                                                

                                     **2002**               **2003**              **2004**

                        USDA Offic   Rev Est       USDA     Estimate      USDA    Forecast
                                                   Offic                  Offic   

  **Market Year Begin**              **10/2002**            **10/2003**           **10/2004**

  Area Planted          3536         3136          3356     3494          0       3674

  Area Harvested        3132         3132          3356     3464          0       3674

  Beginning Stocks      0            0             0        0             0       0

  Production            3696         3684          3639     3854          0       4391

  MY Imports            750          719           780      800           0       850

  MY Imp. from U.S.     125          42            75       25            0       25

  MY Imp. from the EC   0            558           0        0             0       775

  **TOTAL SUPPLY**      4446         **4403**      4419     **4654**      0       **5241**

  MY Exports            0            0             0        0             0       0

  MY Exp. to the EC     0            0             0        0             0       0

  Crush Dom.            3834         3794          3800     4015          0       4521
  Consumption                                                                     

  Food Use Dom.         0            0             0        0             0       0
  Consump.                                                                        

  Feed Seed Waste       612          609           619      639           0       720
  Dm.Cn.                                                                          

  **Total Dom.          4446         4403          4419     4654          0       **5241**
  Consumption**                                                                   

  Ending Stocks         0            0             0        0             0       0

  **TOTAL               4446         **4403**      4419     **4654**      0       **5241**
  DISTRIBUTION**                                                                  

  Calendar Year Imports 350          558           400      650           0       675

  Calendar Yr Imp. U.S. 0            42            0        25            0       25

  Calendar Year Exports 0            0             0        25            0       0

  Calndr Yr Exp. to     0            0             0        0             0       0
  U.S.                                                                            

                                                                                  
  --------------------- ------------ ------------- -------- ------------- ------- -------------

### 

###  

### 

### Table 3. Cotton seed Production, Supply and Demand

  -------------------- -------------- ---------- ---------- ---------- ---------- ----------
  **Commodity**        **Oilseed,                           (1000                 
                       Cottonseed**                         HA)(1000              
                                                            MT)                   

                       2002           Revised    2003       Post       2004       Post

                       Official       Estimate   Official   Estimate   Official   Forecast

  **Market Year                       10/2002               10/2003               10/2004
  Begin**                                                                         

  Area Planted         3200           2800       3000       3100       0          3200
  (COTTON)                                                                        

  Area                 2796           2796       3000       3070       0          3200
  Harvested(COTTON)                                                               

  Seed to Lint Ratio   0              0          0          0          0          0

  Beginning Stocks     0              0          0          0          0          0

  Production           3396           3384       3309       3484       0          3920

  MY Imports           0              0          0          0          0          0

  MY Imp. from U.S.    0              0          0          0          0          0

  MY Imp. from the EC  0              0          0          0          0          0

  TOTAL SUPPLY         3396           3384       3309       3484       0          3920

  MY Exports           0              0          0          0          0          0

  MY Exp. to the EC    0              0          0          0          0          0

  Crush Dom.           2887           2876       2807       2961       0          3332
  Consumption                                                                     

  Food Use Dom.        0              0          0          0          0          0
  Consump.                                                                        

  Feed,Seed,Waste      509            508        502        523        0          588
  Dm.Cm.                                                                          

  TOTAL Dom.           3396           3384       3309       3484       0          3920
  Consumption                                                                     

  Ending Stocks        0              0          0          0          0          0

  TOTAL DISTRIBUTION   3396           3384       3309       3484       0          3920

  Calendar Year        0              0          0          0          0          0
  Imports                                                                         

  Calendar Yr Imp.     0              0          0          0          0          0
  U.S.                                                                            

  Calendar Year        0              0          0          0          0          0
  Exports                                                                         

  Calndr Yr Exp. to    0              0          0          0          0          0
  U.S.                                                                            

                                                                                  
  -------------------- -------------- ---------- ---------- ---------- ---------- ----------

### Table 4: Sunflower-seed Production, Supply and Demand

  --------------------- ------------ ---------- -------- ---------- ---------- ----------
  **Commodity**         **Oilseed,                                  (1000      
                        Sunseed**                                   HA)(1000   
                                                                    MT)        

                        2002         Revised    2003     Revised    2004       Post

                        USDA         Estimate   USDA     Estimate   USDA       Forecast

  **Market Year Begin**              10/2002             10/2003               10/2004

  Area Planted          0            65         0        110        0          184

  Area Harvested        65           65         73       110        0          184

  Beginning Stocks      0            0          0        0          0          0

  Production            77           77         88       133        0          228

  MY Imports            100          88         130      250        0          250

  MY Imp. from U.S.     0            0          0        0          0          0

  MY Imp. from the EC   0            30         0        250        0          250

  TOTAL SUPPLY          177          165        218      383        0          478

  MY Exports            0            0          0        0          0          0

  MY Exp. to the EC     0            0          0        0          0          0

  Crush Dom.            166          149        200      345        0          430
  Consumption                                                                  

  Food Use Dom.         0            0          0        0          0          0
  Consump.                                                                     

  Feed,Seed,Waste       11           16         18       38         0          48
  Dm.Cn.                                                                       

  TOTAL Dom.            177          165        218      383        0          478
  Consumption                                                                  

  Ending Stocks         0            0          0        0          0          0

  TOTAL DISTRIBUTION    177          165        218      383        0          478

  Calendar Year Imports 0            30         0        200        0          225

  Calendar Yr Imp. U.S. 0            0          0        0          0          0

  Calendar Year Exports 0            0          0        0          0          0

  Calndr Yr Exp. to     0            0          0        0          0          0
  U.S.                                                                         

                                                                               
  --------------------- ------------ ---------- -------- ---------- ---------- ----------

### Table 5: Rapeseed Production, Supply and Demand

  --------------------- ------------ ---------- ------- ---------- -------- ----------
  **Commodity**         **Oilseed,                                 (1000    
                        Rapeseed**                                 HA)      

                        2002         Revised    2003    Revised    2004     Forecast

                        USDA         Estimate   USDA    Estimate   USDA     

  **Market Year Begin**              10/2002            10/2003             10/2004

  Area Planted          0            269        0       282        0        290

  Area Harvested        269          269        282     282        0        290

  Beginning Stocks      0            0          0       0          0        0

  Production            221          221        241     235        0        241

  MY Imports            425          461        450     500        0        550

  MY Imp. from U.S.     0            0          0       0          0        0

  MY Imp. from the EC   0            400        0       500        0        500

  TOTAL SUPPLY          646          682        691     735        0        791

  MY Exports            0            0          0       0          0        0

  MY Exp. to the EC     0            0          0       0          0        0

  Crush Dom.            566          614        603     662        0        712
  Consumption                                                               

  Food Use Dom.         0            0          0       0          0        0
  Consump.                                                                  

  Feed,Seed,Waste       80           68         88      73         0        79
  Dm.Cn.                                                                    

  TOTAL Dom.            646          682        691     735        0        791
  Consumption                                                               

  Ending Stocks         0            0          0       0          0        0

  TOTAL DISTRIBUTION    646          682        691     735        0        791

  Calendar Year Imports 350          400        400     400        0        400

  Calendar Yr Imp. U.S. 0            0          0       0          0        0

  Calendar Year Exports 0            0          0       0          0        0

  Calndr Yr Exp. to     0            0          0       0          0        0
  U.S.                                                                      

                                                                            
  --------------------- ------------ ---------- ------- ---------- -------- ----------

# 

### Table 6: Soybean Production, Supply and Demand

  --------------------- ------------ ---------- -------- ---------- ---------- ----------
  **Commodity**         **Oilseed,                                  (1000      
                        Soybean**                                   HA)(1000   
                                                                    MT)        

                        2002         Revised    2003     Revised    2004       Forecast

                        USDA         Estimate   USDA     Estimate   USDA       

  **Market Year Begin**              10/2002             10/2003               10/2004

  Area Planted          0            2          0        2          0          2

  Area Harvested        2            2          1        2          0          2

  Beginning Stocks      0            0          0        0          0          0

  Production            2            2          1        2          0          2

  MY Imports            225          170        200      50         0          50

  MY Imp. from U.S.     125          42         75       25         0          25

  MY Imp. from the EC   0            128        0        25         0          25

  TOTAL SUPPLY          227          172        201      52         0          52

  MY Exports            0            0          0        0          0          0

  MY Exp. to the EC     0            0          0        0          0          0

  Crush Dom.            215          155        190      47         0          47
  Consumption                                                                  

  Food Use Dom.         0            0          0        0          0          0
  Consump.                                                                     

  Feed,Seed,Waste       12           17         11       5          0          5
  Dm.Cn.                                                                       

  TOTAL Dom.            227          172        201      52         0          52
  Consumption                                                                  

  Ending Stocks         0            0          0        0          0          0

  TOTAL DISTRIBUTION    227          172        201      52         0          52

  Calendar Year Imports 0            128        0        50         0          25

  Calendar Yr Imp. U.S. 0            42         0        25         0          25

  Calendar Year Exports 0            0          0        0          0          0

  Calndr Yr Exp. to     0            0          0        0          0          0
  U.S.                                                                         

                                                                               
  --------------------- ------------ ---------- -------- ---------- ---------- ----------

# OIL MEAL

## Production 

MY 2004/05 oilseed meal production is forecast to increase 12 percent on
the strength of higher cottonseed production and larger quantities of
rapeseed/sunflower seed imports for domestic processing. The domestic
crushing industry traditionally produced a product consisting of about
75 percent cottonseed, 15 percent rapeseed and 6 percent soybean. With
the new tax structure and renewed availability of soybean meal from
India incentives are no longer present for import and process of whole
soybeans. However, over the next 3-5 years, the Pakistani feed sector
will need to develop alternative sources of soybean meal to meet
expanding requirements as India is expected to retain more of its
"exportable" supplies to meet domestic needs.

MY 2003/04 meal production increased about 3 percent due to the large,
early season imports of oilseeds.

## Consumption

MY 2004/05 meal disappearance is expected to increase as competitiveness
within and between the poultry and livestock sectors drive producers to
using higher-quality inputs in feed formulations (i.e. use higher
protein rations) in order to improve production efficiencies. This is
most evident within the poultry sector, now in expansion mode to meet
consumer demand for white meat that is perceived as a healthier protein
source. Traditional feed rations are inadequate and contain little or no
protein. Feed millers, more conscious now about meal quality, are
applying soybean meal at an inclusion rate of 15 percent, up from the
traditional 5-7 percent, thus creating an environment that is
encouraging rapid disappearance of higher quality protein meal.

The avian influenza outbreak in Karachi and adjacent territories has
elevated concern among consumers, negatively affecting demand for
poultry meat thus production inputs such as protein meals. This
situation is expected to fade as consumers realize the negligible risk
to human health with proper preparation of poultry based meals.

## Trade

Of all meals imported, soybean meal is the most common with India
holding the advantage on both price and freight. During MY 2004/05,
soybean meal imports are projected to increase in response to greater
domestic demand resulting from the resumption of rail links between
Pakistan and India. In past years Pakistan has imported large quantities
of soybeans under the USDA's 416(b) and PL-480 programs.

### Table 7: Total Oil Meal Production, Supply and Demand

  --------------------- -------------- ------------- ------------ ------------- --------- -------------
  **Country:**          **Pakistan**                                                      

  **Commodity:**        **TOTAL OIL                                                       
                        MEALS**                                                           

                                       **2002**                   **2003**                **2004**

                        USDA Offic     Rev Est       USDA Offic   Estimate      USDA      Forecast
                                                                                Offic     

  **Market Year Begin**                **10/2002**                **10/2003**             **10/2004**

  Crush                 3834           3794          3800         4015          0         4521

  Extr. Rate            0.47652582     0.46995256    0.47394737   0.4587796     #DIV/0!   0.4580845

  Beginning Stocks      0              0             0            0             0         0

  Production            1827           1783          1801         1842          0         2071

  MY Imports            70             5             100          40            0         80

  MY Imp. from U.S.     0              0             0            0             0         0

  MY Imp. from the EC   0              0             0            0             0         0

  **TOTAL SUPPLY**      1897           **1788**      1901         **1882**      0         **2151**

  MY Exports            0              20            0            30            0         50

  MY Exp. to the EC     0              0             0            0             0         0

  Industrial Dom.       0              0             0            0             0         0
  Consum                                                                                  

  Food Use Dom.         0              0             0            0             0         0
  Consump.                                                                                

  Feed Waste            1897           1768          1901         1852          0         2101
  Dom.Consum.                                                                             

  **Total Dom.          1897           1768          1901         1852          0         **2101**
  Consumption**                                                                           

  Ending Stocks         0              0             0            0             0         0

  **TOTAL               1897           **1788**      1901         **1882**      0         **2151**
  DISTRIBUTION**                                                                          

  Calendar Year Imports 0              5             0            50            0         75

  Calendar Yr Imp. U.S. 0              0             0            0             0         0

  Calendar Year Exports 0              0             0            30            0         40

  Calndr Yr Exp. to     0              0             0            0             0         0
  U.S.                                                                                    

                                                                                          
  --------------------- -------------- ------------- ------------ ------------- --------- -------------

### Table 8: Cottonseed Meal Production, Supply and Demand

  --------------------- -------------- ---------- ---------- ---------- ---------- ----------
  **Commodity**         **Meal,                                         (1000 MT)  
                        Cottonseed**                                               

                        2002           Revised    2003       Estimate   2004       Forecast

                        Official       Estimate   Official   Estimate   Official   Estimate

  **Market Year Begin**                10/2002               10/2003               10/2004

  Crush                 2887           2876       2807       2961       0          3332

  Extr. Rate, 999.9999  0.4599931      0.460014   0.459922   0.45998    0          0.460084

  Beginning Stocks      0              0          0          0          0          0

  Production            1328           1323       1291       1362       0          1533

  MY Imports            0              0          0          0          0          0

  MY Imp. from U.S.     0              0          0          0          0          0

  MY Imp. from the EC   0              0          0          0          0          0

  TOTAL SUPPLY          1328           1323       1291       1362       0          1533

  MY Exports            0              0          0          0          0          0

  MY Exp. to the EC     0              0          0          0          0          0

  Industrial Dom.       0              0          0          0          0          0
  Consum                                                                           

  Food Use Dom.         0              0          0          0          0          0
  Consump.                                                                         

  Feed Waste Dom.       1328           1323       1291       1362       0          1533
  Consum                                                                           

  TOTAL Dom.            1328           1323       1291       1362       0          1533
  Consumption                                                                      

  Ending Stocks         0              0          0          0          0          0

  TOTAL DISTRIBUTION    1328           1323       1291       1362       0          1533

  Calendar Year Imports 0              0          0          0          0          0

  Calendar Yr Imp. U.S. 0              0          0          0          0          0

  Calendar Year Exports 0              0          0          0          0          0

  Calndr Yr Exp. to     0              0          0          0          0          0
  U.S.                                                                             

                                                                                   
  --------------------- -------------- ---------- ---------- ---------- ---------- ----------

### Table 9: Sunflower-seed Meal Production, Supply and Demand

  --------------------- ------------ ---------- -------- ---------- -------- ----------
  **Commodity**         **Meal,                                     (1000    
                        Sun-seed**                                  MT)      

                        2002         Revised    2003     Revised    2004     Forecast

                        USDA         Estimate   USDA     Estimate   USDA     

  **Market Year Begin**              10/2002             10/2003             10/2004

  Crush                 166          149        200      345        0        430

  Extr. Rate, 999.9999  0.439759     0.42282    0.435    0.42029    0        0.42093

  Beginning Stocks      0            0          0        0          0        0

  Production            73           63         87       145        0        181

  MY Imports            0            0          0        0          0        0

  MY Imp. from U.S.     0            0          0        0          0        0

  MY Imp. from the EC   0            0          0        0          0        0

  TOTAL SUPPLY          73           63         87       145        0        181

  MY Exports            0            0          0        0          0        0

  MY Exp. to the EC     0            0          0        0          0        0

  Industrial Dom.       0            0          0        0          0        0
  Consum                                                                     

  Food Use Dom.         0            0          0        0          0        0
  Consump.                                                                   

  Feed Waste Dom.       73           63         87       145        0        181
  Consum                                                                     

  TOTAL Dom.            73           63         87       145        0        181
  Consumption                                                                

  Ending Stocks         0            0          0        0          0        0

  TOTAL DISTRIBUTION    73           63         87       145        0        181

  Calendar Year Imports 0            0          0        0          0        0

  Calendar Yr Imp. U.S. 0            0          0        0          0        0

  Calendar Year Exports 0            0          0        0          0        0

  Calndr Yr Exp. to     0            0          0        0          0        0
  U.S.                                                                       
  --------------------- ------------ ---------- -------- ---------- -------- ----------

### Table 10: Rapeseed Meal Production, Supply and Demand

  --------------------- ----------- ---------- --------- ---------- -------- ----------
  **Commodity**         **Meal,                                     (1000    
                        Rapseed**                                   MT)      

                        2002        Revised    2003      Revised    2004     Forecast

                        USDA        Estimate   USDA      Estimate   USDA     

  **Market Year Begin**             10/2002              10/2003             10/2004

  Crush                 566         614        603       662        0        712

  Extr. Rate, 999.9999  0.4523      0.44951    0.45274   0.45015    0        0.44944

  Beginning Stocks      0           0          0         0          0        0

  Production            256         276        273       298        0        320

  MY Imports            0           0          0         0          0        0

  MY Imp. from U.S.     0           0          0         0          0        0

  MY Imp. from the EC   0           0          0         0          0        0

  TOTAL SUPPLY          256         276        273       298        0        320

  MY Exports            0           20         0         30         0        50

  MY Exp. to the EC     0           0          0         0          0        0

  Industrial Dom.       0           0          0         0          0        0
  Consum                                                                     

  Food Use Dom.         0           0          0         0          0        0
  Consump.                                                                   

  Feed Waste Dom.       256         256        273       268        0        270
  Consum                                                                     

  TOTAL Dom.            256         256        273       268        0        270
  Consumption                                                                

  Ending Stocks         0           0          0         0          0        0

  TOTAL DISTRIBUTION    256         276        273       298        0        320

  Calendar Year Imports 0           0          0         0          0        0

  Calendar Yr Imp. U.S. 0           0          0         0          0        0

  Calendar Year Exports 0           20         0         30         0        40

  Calndr Yr Exp. to     0           0          0         0          0        0
  U.S.                                                                       

                                                                             
  --------------------- ----------- ---------- --------- ---------- -------- ----------

### Table 11: Soybean Meal Production, Supply and Demand

  --------------------- -------- ---------- ---------- ---------- -------- ----------
                        2002     Revised    2003       Revised    2004     Forecast

                        USDA     Estimate   USDA       Estimate   USDA     

  **Market Year Begin**          10/2002               10/2003             10/2004

  Crush                 215      155        190        47         0        47

  Extr. Rate, 999.9999  0.7907   0.780645   0.789474   0.78723    0        0.78723

  Beginning Stocks      0        0          0          0          0        0

  Production            170      121        150        37         0        37

  MY Imports            70       5          100        40         0        80

  MY Imp. from U.S.     0        0          0          0          0        0

  MY Imp. from the EC   0        0          0          0          0        0

  TOTAL SUPPLY          240      126        250        77         0        117

  MY Exports            0        0          0          0          0        0

  MY Exp. to the EC     0        0          0          0          0        0

  Industrial Dom.       0        0          0          0          0        0
  Consum                                                                   

  Food Use Dom.         0        0          0          0          0        0
  Consump.                                                                 

  Feed Waste Dom.       240      126        250        77         0        117
  Consum                                                                   

  TOTAL Dom.            240      126        250        77         0        117
  Consumption                                                              

  Ending Stocks         0        0          0          0          0        0

  TOTAL DISTRIBUTION    240      126        250        77         0        117

  Calendar Year Imports 0        5          0          50         0        75

  Calendar Yr Imp. U.S. 0        0          0          0          0        0

  Calendar Year Exports 0        0          0          0          0        0

  Calndr Yr Exp. to     0        0          0          0          0        0
  U.S.                                                                     

                                                                           
  --------------------- -------- ---------- ---------- ---------- -------- ----------

# OILS

## Production

Pakistan is a deficit producer of edible oil, able to meet only 30-33
percent of consumption requirements despite best efforts by the
government to increase domestic production of oilseed crops. MY 2004/05
oil production is forecast to increase 13 percent based on expected
rises in domestic oilseed production and imports. Of domestic production
cottonseed oil accounts for 46 percent, rapeseed oil accounts for 33
percent, and sunflower oil accounts for 20 percent. Share of oil
produced from domestic oilseeds is expected to rise due to increased
planting of sunflower-seed and cottonseed in response to stronger market
demand for cotton and by the solvent extraction industry.

## Consumption

MY 2004/05 edible oil consumption is forecast to increase about 4
percent based on economic and population expansion. "Ghee" (i.e.,
shortening) which accounts for 70 percent of oil disappearance, is
produced virtually totally from palm and cottonseed oil. There is a
growing awareness of the negative health effects of saturated oils,
particularly palm oil and consumers are, when they can afford it,
shifting from "ghee" to liquid oils.

## Trade

Pakistan is one of the world's largest vegetable oil importers. Imported
edible oils represent the second single largest expenditure of foreign
exchange by the country. In effort to address the toll on the country's
foreign exchange reserve, the government is encouraging domestic
production of oilseeds and oil. Despite this rhetoric, production
remains basically stagnant. The domestic market structure is
inefficient, thus returns on oilseeds and by-products are weak and
non-competitive with product sourced from the international market.

Pakistan is a price-sensitive market with relative prices for oils
affecting the final import mix. Palm oil is the cheapest, thus principal
oil imported. With palm oil suppliers offering \"flexibility\" in
contract terms and specifications that product is made even more
attractive. However, with consumers' growing awareness of the health
qualities of vegetable oils, domestically produced liquid oils are
expected to garner a larger share in the Pakistani diet, at the expense
of imported palm oil.

MY 2004/05 oil imports are forecast to increase 4 percent to 1.49 MMT.

During MY 2003/04, oil imports jumped 7 percent mainly due to attractive
international prices over the last 6 months of 2003 and fear of a
smaller cotton crop. The Duty and Tax Remission for Exports (DTRE) for
Afghanistan and 20 percent sales tax exemption on imports for Federally
Administrative Tribal Areas (FATA) also supported this surge in imports.
Palm oil increase was attributed to greater availability of low-priced
palm olean, which is often blended with other liquid oils. In June 2002
the government lowered the import duty on palm olean, making that duty
par with soybean oil. At the same time the duty on sunflower and
rapeseed oils was raised which discouraged trade of such products.

### Table 12: Oil Tariffs and Taxes

  ----------------------- ----------------------- -----------------------
  Commodity               Custom Duty             Sales Tax

  RBD Palm Oil            Rs. 10,850              20 percent

  RBD Palm Olein          Rs. 9,100               20 percent

  Soybean Oil             Rs. 9,100               20 percent

  Sunflower Oil           Rs. 15,650              20 percent

  Canola Oil              Rs. 10,200              20 percent
  ----------------------- ----------------------- -----------------------

Stock

Typically Pakistan retains oil stocks levels equivalent to two months
supply. Stocks are held

both by producers and traders.

### Table 13: Total Oil Production, supply and Demand

  --------------------- -------------- ------------- ----------- ------------- --------- -------------
  **Country:**          **Pakistan**                                                     

  **Commodity:**        **TOTAL OILS**                                                   

                                       **2002**                  **2003**                **2004**

                        USDA Offic     Rev Est       USDA Offic  Estimate      USDA      Forecast
                                                                               Offic     

  **Market Year Begin**                **10/2002**               **10/2003**             **10/2004**

  Crush                 3834           3794          3800        4015          0         4521

  Extr. Rate            0.1517997      0.14944649    0.1568421   0.15915318    #DIV/0!   0.1596992

  Beginning Stocks      128            158           125         168           0         168

  Production            582            567           596         639           0         722

  MY Imports            1442           1332          1580        1430          0         1490

  MY Imp. from U.S.     60             38            55          40            0         50

  MY Imp. from the EC   0              0             0           0             0         40

  **TOTAL SUPPLY**      2152           **2057**      2301        **2237**      0         **2380**

  MY Exports            0              0             0           0             0         0

  MY Exp. to the EC     0              0             0           0             0         0

  Industrial Dom.       92             84            95          91            0         96
  Consum                                                                                 

  Food Use Dom.         1810           1774          1934        1945          0         2082
  Consump.                                                                               

  Feed Waste            35             31            37          33            0         34
  Dom.Consum.                                                                            

  **Total Dom.          1937           1889          2066        2069          0         **2212**
  Consumption**                                                                          

  Ending Stocks         125            168           135         168           0         168

  **TOTAL               2062           **2057**      2201        **2237**      0         **2380**
  DISTRIBUTION**                                                                         

  Calendar Year Imports 0              1333          0           1270          0         1275

  Calendar Yr Imp. U.S. 0              38            0           0             0         50

  Calendar Year Exports 0              0             0           0             0         0

  Calndr Yr Exp. to     0              0             0           0             0         0
  U.S.                                                                                   

                                                                                         
  --------------------- -------------- ------------- ----------- ------------- --------- -------------

### Table 14: Cottonseed Oil Production, Supply and Demand

  ------------------- -------------- ---------- ----------- ---------- ---------- ----------
  **PSD Table**                                                                   

  **Country**         **Pakistan**                                                

  **Commodity**       **Oil,                                           (1000 MT)  
                      Cotseed**                                                   

                      2002           Revised    2003        Post       2004       Post

                      Official       Estimate   Official    Estimate   Official   Forecast

  **Market Year                      10/2002                10/2003               10/2004
  Begin**                                                                         

  Crush               2887           2876       2807        2961       0          3332

  Extr. Rate,         0.100104       0.100139   0.1001069   0.099966   0          0.09994
  999.9999                                                                        

  Beginning Stocks    10             15         10          15         10         15

  Production          289            288        281         296        0          333

  MY Imports          0              0          0           0          0          0

  MY Imp. from U.S.   0              0          0           0          0          0

  MY Imp. from the EC 0              0          0           0          0          0

  TOTAL SUPPLY        299            303        291         311        10         348

  MY Exports          0              0          0           0          0          0

  MY Exp. to the EC   0              0          0           0          0          0

  Industrial Dom.     26             26         26          27         0          30
  Consum                                                                          

  Food Use Dom.       260            259        252         266        0          300
  Consump.                                                                        

  Feed Waste Dom.     3              3          3           3          0          3
  Consum                                                                          

  TOTAL Dom.          289            288        281         296        0          333
  Consumption                                                                     

  Ending Stocks       10             15         10          15         0          15

  TOTAL DISTRIBUTION  299            303        291         311        0          348

  Calendar Year       0              0          0           0          0          0
  Imports                                                                         

  Calendar Yr Imp.    0              0          0           0          0          0
  U.S.                                                                            

  Calendar Year       0              0          0           0          0          0
  Exports                                                                         

  Calndr Yr Exp. to   0              0          0           0          0          0
  U.S.                                                                            
  ------------------- -------------- ---------- ----------- ---------- ---------- ----------

### Table 15: Sunflower-seed Oil Production, Supply and Demand

  --------------------- ----------- ---------- -------- ---------- -------- ----------
  **Commodity**         **Oil,                                     (1000    
                        Sunseed**                                  MT)      

                        2002        Revised    2003     Revised    2004     Forecast

                        USDA        Estimate   USDA     Estimate   USDA     

  **Market Year Begin**             10/2002             10/2003             10/2004

  Crush                 166         149        200      345        0        430

  Extr. Rate, 999.9999  0.39759     0.342282   0.4      0.33913    0        0.33953

  Beginning Stocks      1           3          3        3          3        3

  Production            66          51         80       117        0        146

  MY Imports            2           0          25       0          0        0

  MY Imp. from U.S.     0           0          0        0          0        0

  MY Imp. from the EC   0           0          0        0          0        0

  TOTAL SUPPLY          69          54         108      120        3        149

  MY Exports            0           0          0        0          0        0

  MY Exp. to the EC     0           0          0        0          0        0

  Industrial Dom.       0           0          0        0          0        0
  Consum                                                                    

  Food Use Dom.         66          51         105      117        0        146
  Consump.                                                                  

  Feed Waste Dom.       0           0          0        0          0        0
  Consum                                                                    

  TOTAL Dom.            66          51         105      117        0        146
  Consumption                                                               

  Ending Stocks         3           3          3        3          0        3

  TOTAL DISTRIBUTION    69          54         108      120        0        149

  Calendar Year Imports 0           0          0        0          0        0

  Calendar Yr Imp. U.S. 0           0          0        0          0        0

  Calendar Year Exports 0           0          0        0          0        0

  Calndr Yr Exp. to     0           0          0        0          0        0
  U.S.                                                                      
  --------------------- ----------- ---------- -------- ---------- -------- ----------

### Table 16: Rapeseed Oil Production, Supply and Demand

  --------------------- ------------ ---------- --------- ---------- ---------- ----------
  **Commodity**         **Oil,                                       (1000MT)   
                        Rapeseed**                                              

                        2002         Revised    2003      Revised    2004       Forecast

                        USDA         Estimate   USDA      Estimate   USDA       

  **Market Year Begin**              10/2002              10/2003               10/2004

  Crush                 566          614        603       662        0          712

  Extr. Rate, 999.9999  0.333922     0.33062    0.33333   0.32931    0          0.330056

  Beginning Stocks      16           15         16        15         17         15

  Production            189          203        201       218        0          235

  MY Imports            0            0          0         0          0          0

  MY Imp. from U.S.     0            0          0         0          0          0

  MY Imp. from the EC   0            0          0         0          0          0

  TOTAL SUPPLY          205          218        217       233        17         250

  MY Exports            0            0          0         0          0          0

  MY Exp. to the EC     0            0          0         0          0          0

  Industrial Dom.       5            6          6         7          0          7
  Consum                                                                        

  Food Use Dom.         180          195        189       209        0          226
  Consump.                                                                      

  Feed Waste Dom.       4            2          5         2          0          2
  Consum                                                                        

  TOTAL Dom.            189          203        200       218        0          235
  Consumption                                                                   

  Ending Stocks         16           15         17        15         0          15

  TOTAL DISTRIBUTION    205          218        217       233        0          250

  Calendar Year Imports 0            0          0         0          0          0

  Calendar Yr Imp. U.S. 0            0          0         0          0          0

  Calendar Year Exports 0            0          0         0          0          0

  Calndr Yr Exp. to     0            0          0         0          0          0
  U.S.                                                                          

                                                                                
  --------------------- ------------ ---------- --------- ---------- ---------- ----------

### Table 17: Soybean Oil Production, Supply and Demand

  --------------------- ----------- ---------- --------- ---------- -------- ----------
  **Commodity**         **Oil,                                      (1000    
                        Soybean**                                   MT)      

                        2002        Revised    2003      Post       2004     Forecast

                        USDA        Estimate   USDA      Estimate   USDA     

  **Market Year Begin**             10/2002              10/2003             10/2004

  Crush                 215         155        190       47         0        47

  Extr. Rate, 999.9999  0.176744    0.16129    0.17895   0.17021    0        0.17021

  Beginning Stocks      5           15         6         20         5        20

  Production            38          25         34        8          0        8

  MY Imports            100         92         105       80         0        90

  MY Imp. from U.S.     60          38         55        40         0        50

  MY Imp. from the EC   0           0          0         40         0        40

  TOTAL SUPPLY          143         132        145       108        5        118

  MY Exports            0           0          0         0          0        0

  MY Exp. to the EC     0           0          0         0          0        0

  Industrial Dom.       9           3          9         3          0        3
  Consum                                                                     

  Food Use Dom.         125         108        129       84         0        94
  Consump.                                                                   

  Feed Waste Dom.       3           1          2         1          0        1
  Consum                                                                     

  TOTAL Dom.            137         112        140       88         0        98
  Consumption                                                                

  Ending Stocks         6           20         5         20         0        20

  TOTAL DISTRIBUTION    143         132        145       108        0        118

  Calendar Year Imports 0           60         0         70         0        75

  Calendar Yr Imp. U.S. 0           38         0         40         0        50

  Calendar Year Exports 0           0          0         0          0        0

  Calndr Yr Exp. to     0           0          0         0          0        0
  U.S.                                                                       
  --------------------- ----------- ---------- --------- ---------- -------- ----------

### Table 18: Palm Oil Production, Supply and Demand

  ---------------------- -------- ---------- ------- ---------- --------- ----------
  **Commodity**          **Oil,                                 (1000 MT) 
                         Palm**                                           

                         2002     Revised    2003    Revised    2004      Forecast

                         USDA     Estimate   USDA    Estimate   USDA      

  **Market Year Begin**           10/2002            10/2003              10/2004

  Area Planted           0        0          0       0          0         0

  Area Harvested         0        0          0       0          0         0

  Trees                  0        0          0       0          0         0

  Beginning Stocks       96       110        90      115        100       115

  Production             0        0          0       0          0         0

  MY Imports             1340     1240       1450    1350       0         1400

  MY Imp. from U.S.      0        0          0       0          0         0

  MY Imp. from the EC    0        0          0       0          0         0

  TOTAL SUPPLY           1436     1350       1540    1465       100       1515

  MY Exports             90       0          100     0          0         0

  MY Exp. to the EC      0        0          0       0          0         0

  Industrial Dom. Consum 52       49         54      54         0         56

  Food Use Dom. Consump. 1179     1161       1259    1269       0         1316

  Feed Waste Consumption 25       25         27      27         0         28

  TOTAL Dom. Consumption 1256     1235       1340    1350       0         1400

  Ending Stocks          90       115        100     115        0         115

  TOTAL DISTRIBUTION     1436     1350       1540    1465       0         1515

  Calendar Year Imports  0        1273       0       1200       0         1200

  Calendar Yr Imp. U.S.  0        0          0       0          0         0

  Calendar Year Exports  0        0          0       0          0         0

  Calndr Yr Exp. to U.S. 0        0          0       0          0         0

                                                                          
  ---------------------- -------- ---------- ------- ---------- --------- ----------