Malaysia entered into joint ventures in Pakistan in the field of power, telecommunication, oil exploration, edible oil refinery, dedicated jetty and the largest bulking storage facility at Port Qasim. Dr Mahathir Bin Mohammad, the then Prime Minister of Malaysia, initiated in the year 1993, three Joint Venture Projects with three Malaysian Palm Oil giants, namely FELDA, K. L. Kepong & IOI with Pakistan’s Westbury Group of Companies. By the grace of Allah, all the three joint ventures of Pakistan with Malaysia have performed very well.
The Pak-Malaysia Business Council welcomes the forthcoming visit of Dr Mahathir bin Mohammad to Pakistan next month. Dr Mahathir is a visionary person and has a huge following in Pakistan. The following table will reflect export to and import from Malaysia (mainly Palm Oil):-
Year Export from Import from Balance
Pakistan Malaysia of Trade
2012 252.4 1,855.9 (1,603.5)
2013 219.0 1,653.6 (1,434.7)
2014 227.4 1,215.7 (988.3)
2015 229.0 1,058.1 (829.0)
2016 171.6 1,170.2 (998.6)
2017 167.4 1,176.8 (1,009.3)
In this connection, I must state that Palm Oil is the cheapest edible oil in the world and Pakistan is benefited by this oil imported from Malaysia and Indonesia.
Pakistan imports of Palm Oil are continuously increasing. It was about 2.57 million tons in the year 2016, which increased to 3.14 Million tons in 2018.
Malaysia has consistently been the top exporters of palm oil to Pakistan during past three decades. However, from 2014, Malaysian share is continuously declining while Indonesian share is increasing, as would appear from the following statistics:-
Calendar Total Share of Malaysia Share of Indonesia
(Million/Tons) (Million/Tons) (Million/Tons)
2014 2.321 0.637 (27.5%) 1.684 (72.5%)
2015 1.569 0.349 (22%) 1.220 (78%)
2016 2.410 0.443 (18%) 1.968 (82%)
2017 2.829 0.577 (20%) 2.252 (80%)
2018 (Jan-Sep) 2.083 0.601 (29%) 1.482 (71%)
The main reason is due to aggressive Indonesian sales in the Pakistani market after G2G Preferred Trade Agreement (PTA) with Indonesia.
The exports from Malaysia have decreased viz-a-viz Indonesia for various reasons, including more competitive prices by Indonesia and aggressive sales policy from Indonesian sellers, GAPKI.
Pakistan has established many edible oil refineries mostly at Port Qasim, with a view to converting crude palm oil into refined oil (called RBD Palm Oil).
The Malaysian government has levied Export Duty on Crude Palm Oil (CPO) at certain level of prices (at above RM 2,250), which also discourage export of CPO. Therefore, for increase in export of Palm Oil from Malaysia, Export Duty on CPO needs to be removed/rationalized by Malaysian Government, which will increase the sale of Malaysian Palm Oil by at least 20 percent.
Indonesia also discourages sale of crude palm oil to Pakistan.
Pak-Malaysia Business Council has noted that Prime Minister Imran Khan recently visited Malaysia and had meetings with the Prime Minister of Malaysia, Dr Mahathir, who is always a well-wisher and friend of Pakistan. The Advisor of Prime Minister for Commerce, Textile, Industry and Investment, Abdul Razzak Dawood accompanied the Prime Minister along with the Finance Minister and others.
In view of the trade deficit, they urged the Malaysian government to review the trade imbalance with a view to taking all necessary steps to improve the position.
Pakistan is a big supplier of IRRI and Basmati rice and the Malaysian requirement is of 1,000,000 M.Tons annually for domestic consumption. The share of Pakistan is not more than 200,000 Tons. We would request the Malaysian government to enhance the quota of Pakistani rice export to Malaysia, at competitive prices.
Pakistan also has keen interest to export Halal food, fruits, mango and mandarin, vegetable, etc. Incidentally, Malaysia has imposed 5 to 7% duties on import of mango and mandarin, which need to be reviewed.
Pakistan welcomes Joint Ventures in Malaysia, apart from additional industry like:
— Edible Oil,
— Halal Food,
— Infrastructure Development,
— Palm Oil Plantation
The investment policy of Pakistan is most attractive and foreigner can invest 100% in most industries, except infrastructure.
Pakistan High Commission in Malaysia has played a vital role in establishing Malaysia-Pakistan Business Council which is headed by Dato’ Seri Nazir Merselam. The Pak-Malaysia Business Council of Federation of Pakistan Chambers of Commerce & Industry has invited a delegation from Malaysia in the 2nd half of this year, mainly to enhance possibility of export goods from Pakistan.
Pak-Malaysia Business intends to hold a one-country exhibition and an investment conference in Kuala Lumpur to boost joint ventures between the two brotherly countries.
Pak-Malaysia Business Council shall endeavour to make its best towards enhancing bilateral, economic and trade relations between Pakistan and Malaysia.
(The writer is Chairman, Pak-Malaysia Business Council of Federation of Pakistan Chambers of Commerce & Industry)