ISLAMABAD, April 12: Import bill of edible oils jumped by 55.62 per cent to $434.48 million (Rs25.5 billion) in July-March, 2002-03, as compared to corresponding period of previous year thus raising the government’s tax revenue by Rs8.3 billion in the form of customs duty, sales tax and income tax.
The incidence of taxes on this essential foodstuff is around 40 per cent. This clearly shows that the government has a vested interest in the import of edible oil at whatever cost. The higher the cost the more the tax revenue for the government!
It also shows how “concerned” it is about remedying the worsening malnutrition and rising poverty in Pakistan. The lip service to poverty reduction, observed a veteran economist, is evidently only an excuse to obtain loans offered by the international financial institutions.
This also makes short shrift of the pious sentiment expressed by the Central Board of Revenue against the levy of sales tax on foodstuffs.
With its share in total import bill ($9.03 billion) rising by one percentage point to 4.81 per cent, the tab on edible oils stemmed from an incomprehensible rise in import of soybean oil, a study of the foreign trade statistics made available by the Federal Bureau of Statistics.
During the period under review, the soybean oil import soared 209 per cent to 67,956 tons. The import of palm oil too remained on the ascendant but it inched up only by 4.69 per cent to 902,539 tons. An intriguing aspect of such imports is that the import of soybean was increased dramatically in March 2003, when its price had touched the sky.
In February 2003, the country imported only 4,191 tons of this edible oil. The very next month saw its import jumping to 40.691 tons. The remaining nearly 27,000 tons were imported during the preceding 8 months, at an average rate of around 3408 tons per month.
The average price of soybean oil calculated from the figures in FBS data during the first nine months of 2002-03 comes to $548.30 per ton. During the same period of 2001-02, it was $351.64 per ton. This means an increase of $196.66 per ton or 55.93 per cent between the two periods.
The situation becomes particularly mind-blowing when we see that the average import cost of palm oil during the first nine months of current financial year was $440.51 million. Although this is nearly $126 per ton more than during the same period of previous year, it is still lower by $107.79 than the average rate of soyabean oil.
As a result, the share of edible oil group in the import bill of food group ($735.02 million) also rose to nearly 60pc, that is, 14pc more than during July-March 2001-02. The 21.06pc increase in food group import bill over previous year is largely attributable to edible oil.
The food group itself accounted for 8.14pc of the overall import bill, as against 8.26pc during July-March 2001-02. Apart from edible oils, other major imports in this group included tea ($129.29 million), pulses ($92.45 million) and milk & its products ($15.4 million). This is 3.82pc, 2.76pc and 36.74pc, respectively, more than the same period of previous year.
But the main drain on foreign exchange resources was on account of imports of Machinery group and Petroleum Products - 22.32pc and 26.74pc, respectively. In fact, only these groups were able to increase their share in overall import bill over 20.00pc and 26.58pc, respectively, of previous year. Thus they were also accountable for 22.80pc rise in imports during the 9-month period under review.
The machinery group imports amounted to $2.01 billion, denoting 37.10 increase over July-March, 2001-02. Major categories in this group included textile machinery ($367.73 million), road motor vehicles ($343.56 million), power generating machinery ($199.01 million), electrical machinery ($151.80 million) and office machines ($145.15 million).
PETROLEUM GROUP: At $2.41 million, it surged by 23.55pc over the previous year. In this group petroleum crude imports (5,329,378 tons) declined by 1.76pc, but its import bill went up 18.25pc. Consequently, the share of petroleum crude also declined from 12.37pc during the same period of previous year to 11.91pc in the current year.
