The lack of US currency in the nation and the failure of two ports to clear imported consignments are to blame for the dramatic decline in edible oil stockpiles.
Since traders have so far been unable to get Letters of Credit (LCs) due to the lack of dollars, the stocks can meet the needs for the upcoming three weeks. More than ten ships carrying shipments of edible oil are also stranded at the ports of Karachi and Gwadar. A lack of edible oil has sparked worries about a market crisis, and the ships are transporting 175,000 tonnes of it.
The State Bank of Pakistan (SBP) resolved in December 2022 to lift import restrictions starting on January 2, 2023, allowing authorised dealers (ADs) to give priority to/facilitate imports based on specific categories.
The central bank states that ADs may favour imports under the following categories: essential imports, energy imports, imports by industries with an emphasis on exports, imports of inputs for agriculture, deferred payment/self-funded imports, and imports for export-oriented projects that are almost finished.These include products from industries that are fundamental to society, such as those related to food (wheat, edible oil, etc.) and pharmaceuticals (raw materials, life-saving/essential drugs, surgical devices, including stents). Palm and soybean oilseeds make up about 90% of the oilseeds imported into Pakistan. The State Bank of Pakistan recently published a report for the first quarter of the fiscal year 2022 that featured a particular section on increased imports of palm and soybeans. The research states that Pakistan's imports of palm and soybean products were $ 4 billion in FY21, up 47 percent year over year, as opposed to a compound annual growth rate of 12.3 percent during the previous 20 years. Since the turn of the century, domestic dependency on soybean and palm has been sharply rising.