PAKISTAN imports 2.6 million tonnes of crude and refined edible oil annually, and is the third-largest importer of the commodity after China and India.

There are over 200 licensed cooking oil and ghee manufacturing companies in the country, collectively producing 10,000 tonnes of oil and ghee daily.

The sector says it pays over Rs70 billion each year to the exchequer in the form of various duties and taxes but has been facing a crisis for the last one year or so — not because of any unexpected surge in edible oil prices on the world market or any hurdles in imports, but owing to a check on the quality and standard of its products at home.

The Punjab Food Authority (PFA), an agency formed in 2011 to regulate food safety and hygiene in the province, has been raiding various mills and collecting samples of oil and ghee products to check their quality.

It has also issued lists of edible oil and ghee brands it has banned and those it has declared unfit for human consumption. It has also given a five-year deadline to the mills to eliminate the manufacturing of vanaspati ghee.

Stepping up its drive against the vanaspati ghee, the PFA has recently hoisted banners along main arteries of all major towns, appealing to public to stop consuming the “hazardous” commodity.

The affected industrial units had gone on strike for a couple of times to protest raids by the PFA. Millers also accuse the food authority of engaging in a defamation campaign against their products by leaking quality-test reports to the media before sharing and discussing them with millers.

The makers argue that the product is a cheap source of food for the poor, but the Punjab Food Authority says it leads to diseases such as blood pressure, heart attacks and obesity

In a recent letter to the prime minister, the Pakistan Vanaspati Manufacturers’ Association (PVMA) complained that the PFA had unilaterally banned the vanaspati and vegetable ghee, erecting technical barriers on the import of palm oil from Malaysia and Indonesia. This, the association said, violated the World Trade Organisation (WTO) regime and preferential trade agreements (PTAs) signed with the two countries.

The industry meets 75 per cent of its raw material (edible oil) needs from imports, 94pc of which comprises palm oil while the rest includes coconut oil, olive oil, etc. Around 75pc of the palm oil is imported from Malaysia.

Umar Aslam Khan, general secretary of the PVMA, fears that the provincial food authority’s policy could lead to a WTO fine on the country for violating its rules. Moreover, Pakistan could also lose exports worth $600m to Malaysia and Indonesia in case the two countries invoke the PTAs.

Vanaspati makers also assert that imposing a ban on their products doesn’t fall within the jurisdiction of the PFA, and they have filed a petition in the Islamabad High Court in this regard. They say they are already following the standards set by the Pakistan Standards and Quality Control Authority (PSQCA) in line with the guidelines of the WHO, ISO and other international bodies.

Referring to the ill effects of ghee because it contains trans-fat, Mr Khan says fat is also found in all bakery products and fast food, but the same are not being banned by the PFA, as it has been left up to the consumer to decide how much of the nutrient one wishes to take.

He argues that vanaspati ghee is the cheap source of energy for the poor and a ban on it will increase malnutrition among them.

PFA Director General Nurul Ameen is, however, determined to implement the agency’s policies which he says will benefit consumers and farmers in the long run.

He alleges that the industry has been importing soap-grade palm oil, which then sells as edible commodity on the market, risking health of consumers. “Even our teenagers are suffering heart attacks,” he says.

He says the decision to ban vanaspati ghee was taken on the basis of a three-month research by a panel of food technologists of the authority. They found that the ghee and hydrogenated oil caused diseases such as blood pressure, heart attacks and obesity.

On the authority’s jurisdiction to take such a step, he says that after the 18th Constitutional Amendment it’s the PSQCA that has lost powers to regulate food and related businesses in provinces.

Not impressed by the argument that the country may lose exports, Mr Ameen says the ban on palm oil import will instead save foreign exchange reserves because the country’s fruit and vegetable exports worth only a fraction of palm oil imports.

He says the food authority is going to launch an awareness campaign to ask the people to reduce their annual oil and ghee consumption from 18kg per head on average to 3kg, as is the world standard.

The PFA will also make the edible oil industry to mix 35pc of locally produced mustard, canola and corn oil into their products, which are currently made from imported palm oil.

Published in Dawn, The Business and Finance Weekly, November 6th, 2017