Pakistan's spending on palm oil imports surged to an unprecedented $3.785 billion in the fiscal year ending June 2026, official data reveals, as the country's growing appetite for cooking oil and ghee collides with stagnant domestic oilseed production. Main Developments According to the Pakistan Bureau of Statistics, the nation imported 3.482 million tonnes of palm oil in FY26, up from 3.214 million tonnes worth $3.4 billion the previous year. The average price per tonne also rose, climbing to $1,078 from $1,056 in FY25. Pakistan Vanaspati Manufacturers Association Chairman Sheikh Umer Rehan linked the record imports to rising population-driven demand for edible oils and lower domestic crops such as cottonseed. Edible oil consumption has jumped to 4.8 million tonnes annually from 4 million tonnes five years ago, he noted. Read also: Why Pakistan's wheat import plan signals deeper food security risks Background Despite being a major consumer of cooking oil and ghee, Pakistan has never formulated a comprehensive edible oil policy since independence, Rehan lamented. The country relies heavily on imports to meet domestic demand, with palm oil—primarily sourced from Malaysia and Indonesia—accounting for the bulk of edible oil imports. The industry faces an additional challenge from tax policy changes. The Federal Board of Revenue is now pressuring manufacturers to pay general sales tax based on the Maximum Retail Price rather than the ex-mill price—a shift introduced in the FY27 budget that expands the scope of the Third Schedule of the tax code. Why It Matters The new sales tax mechanism is expected to push ghee and cooking oil prices up by Rs10-15 per kilogram, according to the PVMA chairman. Data from the Sensitive Price Index already shows price increases over the past year: a 5-litre cooking oil container now costs Rs2,975-3,110, up from Rs2,800-3,000, while 2.5kg ghee has risen to Rs1,500-1,565 from Rs1,425-1,485. Rehan warned that the FBR's approach, rather than creating a business-friendly environment, is adding complications for taxpayers and raising costs for consumers already grappling with inflation. What's Next The PVMA had urged the government to cut taxes on the edible oil and ghee sector in the FY27 budget to ease the public burden, but the budget instead expanded the MRP-based tax collection mechanism. With no edible oil policy in place and domestic oilseed production lagging, Pakistan's import dependency—and the associated foreign exchange outflows—is likely to persist or grow.