The government of Pakistan has backtracked on its decision to reduce palm oil import duties and taxes due to a lack of industry response, AgriCensus reported from local media reports on 28 October.
In an earlier announcement, the minister for planning and development Asad Umar said the government was planning to reduce vegetable oil taxes from 17% to 8.5% on 18 October, in a bid to control domestic vegetable oil prices, according to the report.
However, reports indicated that vegetable oil importers had not received official notifications from the Federal Board of Revenue (FBR) on the reduced vegetable oil duties, AgriCensus wrote, and the government was reluctant to push measures further without seeing a commitment from the industry to reduce prices.
“Pakistan’s decision to withdraw plans to cut vegetable oil taxes may not have much impact at their markets, but it could dent some demand as it is unfavourable for palm oil origins,” Anilkumar Bagani, research head at Mumbai-based vegetable oil broker Sunvin Group, told AgriCensus.
The government's move comes against a backdrop of high prices for palm oil at origin and high freight costs, the report said.
“There is no benefit for end consumers and the local market [from an import tax cut]...so the government will save the revenue instead,” Abdul Hameed, director of sales at Pakistan-based Manzoor Trading Co, told AgriCensus.
The fourth largest importer of palm oil globally, Pakistan is forecast to import 3.6M tonnes of the oil in 2021/22, a rise of 11% on the previous year, according to United States Department of Agriculture (USDA) statistics quoted in the report.