Manufacturers of branded ghee and cooking oil have raised prices, even as the cost of imported palm oil has declined in recent weeks. According to a retailer, the price of branded ghee and cooking oil has increased by Rs. 80 per kg/litre, reaching Rs. 570, with some major brands hiking prices by as much as Rs. 100 per kg/litre.

Sheikh Umer Rehan, Chairman of the Pakistan Vanaspati Manufacturers Association (PVMA), explained the price disparity, noting that global palm oil prices, which had previously risen to $1,285 per tonne, have now dropped to $1,185 per tonne. This decline has brought the local market price of palm oil down to Rs. 16,500 per maund from Rs. 19,000.

Smaller and medium-sized manufacturers, who dominate the market, have responded to the drop in palm oil prices by reducing ghee and cooking oil prices by Rs. 40 per kg/litre after an earlier Rs. 80 hike. However, branded products, which account for only 5% of the market, have yet to adjust their prices. Rehan attributed this delay to the longer time required by branded manufacturers to reflect price changes due to their extensive printing, distribution, and marketing processes. He assured that prices for branded items would gradually decrease.

Pakistan is heavily reliant on palm oil imports, with 90% sourced from Indonesia and 10% from Malaysia. The country consumes approximately five million tonnes of ghee and cooking oil annually, requiring 3.5 million tonnes of palm oil imports to meet demand.

During the first five months of FY24, Pakistan imported 1.319 million tonnes of palm oil worth $1.26 billion, compared to 1.248 million tonnes worth $1.17 billion in the same period last year. The average per tonne price of palm oil rose slightly to $954 from $941 during this period.