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Pakistan suffered $600m trade deficit with Malaysia in '98-99

JAVED MEHMOOD

ISLAMABAD: Pakistan suffered a huge deficit of $600 million in trade with Malaysia during 1998-99, mainly due to heavy imports of edible oil, it was learnt.

The country's exports to Malaysia in the last fiscal year remained as low as $33 million, but imports amounted to $633 million, resulting in the big trade imbalance for Pakistan.

Only Pakistan's rice exports to Malaysia touched the double digit in value (in million dollars) and the commodity fetched $12.274 million in 1998-99, while the quantum of exports of other products to the said destination was very disappointing.

Fixed vegetable oil and fats imports from Malaysia are the root-cause of trade imbalance to Pakistan each year and, like 1998-99, in the past also in the country paid a huge amount of $537.084 million dollars for import of these commodities.

Other mentionable imports from Malaysia are crude rubber, cork & wood (all types), chemical materials and products, rubber manufactures, machinery and its parts.

However, official statistics now show a gradual but steady fall in import of fixed vegetable oil and fats from Malaysia.

For example, the country spent $739.108 million on the import of vegetable oil and fats in 1995-96 and in 1996-97 their imports dropped to $464.525 million. In 1997-98 their imports again increased to $625.336 million, but fell to $537.084 million in 1998-99, indicating $88.252 million relief to Pakistan.

Sources in the ministry of commerce are of the opinion that in future the imports of edible oil would decline gradually due to duty-free import of oilseed and increase in the domestic output of canola, sunflower, and other oil-oriented crops.

Statistics exhibit $163.647 million decline in the imports of edible oil in the first seven months of the current fiscal year as total import of edible oil amounted to $244.365 million, against $408.012 million in the corresponding period of last year.

The way the country is increasing cultivation of edible oil-based crops it appears that in the coming few years Pakistan would succeed in minimising its import of edible oil and fats substantially. Credit goes to the Pakistan Oilseed Development Board (PODB) which is entreating local farmers to grow more sunflower and canola crops. The area under canola cultivation expanded to 175,000 acres in 1998-99, as against 8,000 acres in 1994-95. Similarly, sunflower acreage swelled to 427,000 acres during last fiscal year, against 185,000 acres in 1994-95.

Sources in the ministries of commerce, food and agriculture maintain that the government should give credit and support price to farmers to grow more edible oil-producing crops in the same way the wheat cultivation is being encouraged in the country.

Recently, sources said, the government has raised the support price of wheat to Rs 300 per 40 kg, as a result of which the commodity's area under cultivation has increased sharply, brightening chances of achieving autarky in wheat output in 1999-2000.

The government should evolve a similar strategy as early as possible in order to save millions of dollars being squandered on the import of edible oil every year, sources in trade said.