Eliminate Condition in IPO-2020 Regarding Addition of Red Dye for Import of Palm Stearin by Soap Manufacturers

Reform Description Condition Imposed by the Government for Importers of Palm Stearin to Mix Red Dye has been Removed

Before: It was compulsory to mix red dye in Palm Stearin before importing, which increased the cost and also delayed shipments.   

After: Due to this reform, Palm Stearin can be imported without the addition of red dye.

Sector Soap and Detergent Industry

Manufacture of Chemicals and Chemical Products

Contribution to National Exchequer: Rs. 18 Billion

Beneficiaries 600+ Industrial Units (104 Organized and 500+ Unorganized)

250,000 Employees (approx.)

Jurisdiction/Location Federal (Entire Pakistan)
Department Ministry of Commerce/ Pakistan Standard Quality Control Authority (PSQCA)
Date of Implementation 25-05-2021
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Details

 

 

 

 

 

 

Difficulty

●  Palm Stearin is a byproduct of palm oil and is used as the main raw material for manufacturing of soap as well as in some food products.

● Many years ago, complaints were received that some elements were importing palm stearin and selling it in the market as Ghee, because it has a similar appearance.

● The government imposed a condition that the import of palm stearin will be allowed only if the foreign supplier mixes Red dye into it before shipment to prevent it being marketed as Ghee. Subsequently, the red dye had to be removed through bleaching by soap manufacturers.

● The soap industry contacted BoI and complained that this condition is adding extra cost, consuming extra time and imposing extra burden on them.

 

 

Analysis

● BoI initiated consultations with the stakeholders and it was found that Palm stearin is now costlier than Vanaspati ghee and multiple mechanisms are also available to prevent misuse, including the role of other Regulatory Authorities such as PSQSA and Provincial Food Authorities.

● Therefore, the regulatory condition of Red Dye seemed harsh and unwarranted.

 

 

Solution

● After carrying out consultations with the Ministry of Commerce, PSQCA, Pakistan Business Council and Soap Manufacturers, it was agreed that this condition needs to be eliminated.

● Accordingly, the Ministry of Commerce issued SRO No. 588(I)/2021 dated 25-5-2021 to eliminate this regulatory requirement.

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