In January 2025, Malaysia and Pakistan took a significant step in reinforcing their partnership in the palm oil industry through strategic agreements that are expected to reshape regional trade dynamics. The collaboration, which was a key highlight of the 7th Pakistan Edible Oil Conference (PEOC) held in Karachi, signals Malaysia’s commitment to supplying high-quality, sustainable palm oil products to Pakistan.
Malaysia’s Minister of Plantation and Commodities, Datuk Seri Johari Abdul Ghani, emphasized that this partnership would not only enhance Pakistan’s edible oil and food manufacturing sectors but also position Pakistan as a pivotal distribution hub for Malaysian palm oil exports to Central Asia. The evolving nature of this alliance reflects both nations’ commitment to strengthening economic ties while ensuring sustainability and efficiency in palm oil trade.
The PEOC 2025 provided a crucial platform for industry leaders, government officials, and stakeholders from both countries to discuss strategies aimed at bolstering palm oil trade. Minister Johari highlighted the rapid growth of Pakistan’s food sector, valued at approximately USD 115 billion, with an expected expansion rate of 7.5% over the next five years. This rapid growth creates significant opportunities for Malaysia to introduce its palm oil products into Pakistan’s food industry, where specialty fats play a critical role.
With Malaysia’s advanced research and development capabilities, the partnership will help deliver tailored solutions that enhance the quality and sustainability of palm-based products. By leveraging Malaysia’s expertise, Pakistan’s food sector can introduce innovative palm oil applications that align with consumer trends, nutritional requirements, and industrial needs.
Recognizing Pakistan’s geographic advantage, Malaysia has devised an ambitious plan to transform the country into a distribution center for palm oil exports destined for Central Asia. Over 90% of Pakistan’s palm oil imports already pass through Port Qasim, making it a natural hub for redistribution to neighboring markets. Malaysia intends to capitalize on this by investing in logistical and supply chain infrastructure to ensure the seamless import and export of palm-based specialty fats, oleochemicals, and other derivative products. This initiative will significantly boost Pakistan’s edible oil sector and establish it as a key player in regional trade.
Additionally, collaborative efforts, including joint research and development projects, are expected to strengthen palm oil applications beyond the food sector, particularly in the chemical and pharmaceutical industries, where palm oil-based products have shown great potential.
Pakistan’s role as a major importer of Malaysian palm oil has been consistently significant over the years. In 2024, Pakistan imported approximately 860,260 tonnes of Malaysian palm oil, reflecting a notable increase from the 753,759 tonnes recorded in 2023.
Historically, Malaysia’s palm oil exports to Pakistan reached a peak of 2.1 million tones in 2010. However, in recent years, Indonesia has managed to capture a larger share of Pakistan’s palm oil market due to aggressive pricing strategies and trade agreements.
The renewed collaboration between Malaysia and Pakistan, along with a strong emphasis on sustainable practices, is expected to help Malaysia reclaim its market share and reestablish itself as Pakistan’s primary palm oil supplier.
The partnership extends beyond trade and economic benefits, as both nations are actively working towards promoting sustainability in the palm oil industry. Malaysia, as one of the world’s leading palm oil producers, has implemented stringent sustainability standards to ensure environmentally friendly practices. The Malaysian Sustainable Palm Oil (MSPO) certification program has played a vital role in setting benchmarks for responsible palm oil production, ensuring that palm oil sourced from Malaysia adheres to ethical and ecological standards.
Through this partnership, Malaysia is committed to assisting Pakistan in adopting sustainable palm oil practices, reducing environmental concerns, and promoting eco-friendly alternatives in its food processing and industrial applications.
While Malaysia and Pakistan are poised to strengthen their trade relations, global market dynamics remain a key factor in shaping the future of the palm oil industry. Price fluctuations, driven by factors such as production levels, weather conditions, and international demand, continue to influence palm oil trade.
In early 2025, the global palm oil market faced volatility due to varying production forecasts. While there were expectations of a production recovery in the second half of the year, the first quarter remained weak due to heavy rains affecting palm oil yields in East Malaysia. These fluctuations impact price stability and influence import decisions by major buyers, including Pakistan.
Palm oil prices are also closely linked to the performance of rival edible oils, such as soybean oil and sunflower oil. In early 2025, Chicago Board of Trade (CBOT) soyoil prices saw a decline, while Dalian palm oil futures exhibited mixed performance.
As a result, Malaysia’s palm oil market responded accordingly, with price movements reflecting global trends. The competition among edible oils remains a critical factor for Malaysia and Pakistan as they navigate market dynamics to ensure a stable and mutually beneficial trade environment.
Despite these challenges, Malaysia remains confident in its ability to sustain and expand its palm oil exports to Pakistan through value-added offerings and strategic pricing. The increasing demand for palm-based specialty fats in Pakistan’s bakery, confectionery, and snack food industries presents an opportunity for Malaysia to introduce innovative palm oil derivatives.
Additionally, the use of palm oil in non-food sectors, such as cosmetics, personal care products, and bio-based chemicals, opens new avenues for trade expansion. By diversifying palm oil applications, Malaysia aims to provide Pakistan with high-value products that cater to a broad range of industries. The geopolitical and economic landscape also plays a role in shaping the future of the Malaysia-Pakistan palm oil trade. With Pakistan’s government prioritizing food security and cost-effective imports, Malaysia’s ability to offer competitive pricing and flexible trade agreements will be instrumental in securing long-term partnerships.
Furthermore, regional economic collaborations, such as those within the Organization of Islamic Cooperation (OIC), present an opportunity for both nations to strengthen their trade relations through preferential trade agreements and mutual investment initiatives.
Looking ahead, the partnership between Malaysia and Pakistan is set to have far-reaching implications not only for the palm oil sector but also for the broader economic landscape of both nations. By positioning Pakistan as a central hub for palm oil distribution to Central Asia, Malaysia gains access to new markets while enhancing its export footprint. This collaboration not only reinforces bilateral trade relations but also contributes to regional economic integration, benefiting industries beyond edible oils.
The potential for Malaysia and Pakistan to expand their collaboration beyond palm oil is also worth noting. With strong diplomatic ties and mutual interests in trade and investment, both nations have opportunities to explore joint ventures in agriculture, manufacturing, and technology-driven industries. The lessons learned from successful palm oil trade agreements could serve as a model for broader economic partnerships that drive long-term growth.
The strategic partnership between Malaysia and Pakistan in the palm oil sector represents a win-win scenario for both nations. With Malaysia’s commitment to delivering high-quality, sustainable palm oil and Pakistan’s growing demand for edible oils, the collaboration is set to yield substantial economic and industrial benefits.
As the global palm oil market evolves, both countries must continue to adapt to changing conditions, leverage technological advancements, and maintain a focus on sustainability to ensure lasting success in this vital trade relationship.
