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According to UN Comtrade database, Pakistan’s share in the global meat trade stands at just 0.2 percent. At just $300 million annual export earnings, the country’s meat exports do not even qualify among the top-15 exporting industries (on 2-digit HS code basis). By most estimates, Pakistan ranks among top five countries with the largest livestock population. What then truly explains Pakistan’s non-existent participation in global meat trade?

Most of the structural challenges that hinder its competitiveness and growth potential are well known. Firstly, the lack of traceability systems for cattle stock poses a significant obstacle. Without effective traceability, meeting international standards and ensuring quality control becomes difficult, limiting Pakistan’s access to global markets. Secondly, the presence of Foot and Mouth Disease (FMD) further restricts market access due to health concerns, necessitating extensive vaccination programs and the establishment of quarantine zones. The dynamics of traditional cattle grazing by nomadic herders means this shall remain an uphill task, further compounded by weaknesses in enforcement by the veterinary monitoring and supervision departments in the public sector.

Furthermore, outdated methods and technologies prevalent in aggregating, transporting, and slaughtering animals hinder efficiency and quality standards. This not only affects the productivity of the industry but also undermines efforts to meet international demands. Moreover, local industry has failed to truly break into the higher value frozen de-boned beef cuts, and instead remains dominated by the fresh and chilled carcasses or uncut bone-in categories. The limited infrastructure and capacity for producing de-boned cuts impede industry’s ability to diversify their portfolio of offerings, failing to meet the preferences of consumers across most major markets.

Additionally, despite some improvements in dairy productivity, Pakistan struggles with low meat yield from animals designated for meat production. This inefficiency in the supply chain stems from various factors, including an unattractive domestic market where buying and selling are based on the appearance of the animal rather than its weight. The existing price control regime further constrains profitability for livestock farmers, discouraging investment in improving meat yield.

But beyond these rightfully oft-discussed challenges, lies the crisis of firm size and access to credit. Although the full number of the meat exporting firms from Pakistan is publicly unknown, a list of 70 firms put together by BR Research indicates that not one exporter in that list qualifies for the generally accepted definition of large industry ($50 million). Of the total meat exports $427 million during 2022-23, more than two-thirds – or $272 million - were contributed by just 15 players that each exported more than a million-dollar worth of shipments. The remainder, $155 million worth of exports, was by smaller players that exported less than a million dollars or less.

The fact that meat exporting industry of Pakistan is near exclusively made up of small and medium-sized firms, with little to no access to banking credit. Meanwhile, the industry-wide banking credit indicates that up to 98 percent of loans/advances by commercial banks to meat processing firms is availed by large corporates. Contradiction?

Not really. Effectively, the loans/advances data implies that banking credit availed by meat processing industry most likely makes it way to processed meat brands that dominate the local market. Many local brands – such as K&N’s or Sufi – have little to no presence in the export market. Meanwhile, total credit available to SME meat processing industry stands at less than a million dollars. Even if this assumption were incorrect, the total outstanding credit to the meat processing industry has averaged at under $30 million for the past several years, declining even in nominal Pak Rupee terms in recent months. This is just 10 percent of the average annual exports of the sector. Compare this to textiles, where the bank credit to exports ratio has averaged over 50 percent for the last 10 years.

It is true that the industry needs to invest in value chains and enhance processing capabilities to grow exports in a meaningful way. However, most importantly, it needs to spend in a big way on its marketing budget to run advocacy campaigns and gain market access across major potential export destinations. None of that can happen if the plays remain tiny, with next to no access to finance.

The story, originally published May 17, 2024, was updated on May 20, 2024 to incorporate an infographic on ‘15 exporters account for two-thirds of Pak meat exports’

Comments

200 characters
KU May 17, 2024 12:00pm
Like agriculture, meat industry was never a serious quest of any govt. This industry too suffers from lack of knowledge n public policy, e.g., success is in special breeds of cattle/goat breeds.
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KU May 17, 2024 12:53pm
On avg, our local breeds of water buffaloes take 3 years to put on 600 kg and cows 400 kg, on good feed, The meat producing breeds around world put on 1500 kg weight in 18 months. Opportunity cost?
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test May 17, 2024 04:21pm
Yum China revenue 11 billion usd US (Yum Brands revenue 7 billion usd Mcdonalds 25.5 billion usd Pizza Hut US 7 billion usd Dominos 4.5 billion usd Papa Johns 2 billion usd Burger King 2 billion usd)
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Bilal May 17, 2024 07:33pm
A lot of the assumptions, issues and solutions mentioned are incorrect. Being a member of the industry, I may be able to point you in the right direction if required. Regards
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KU May 17, 2024 09:24pm
@Bilal, you should share your thoughts n advice, many farmers would benefit. At the moment, agri dept or livestock dept does not help famers in anyway.
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Aam Aadmi May 18, 2024 12:43pm
Better export 'Lotas' rather than anything else and get rid of them. We have those 'Lotas' in surplus as is evident from the general elections 2024.
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Adil Iqbal Ladha May 18, 2024 01:03pm
Numbers are reliable/reflective. Potential is huge, revenue can be quickly tripled. Value addition and branding can be game changer but inconsistent policies !!! First step to recognize as industry
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Adil Iqbal Ladha May 18, 2024 01:04pm
@KU, does they help anyone ?
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Shamim Ahmad May 18, 2024 11:29pm
@Aam Aadmi, Irrelavant
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Az_Iz May 19, 2024 02:11am
Even India used to and continues to export beef many times over.
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Az_Iz May 19, 2024 02:13am
India is the second largest exporter of beef.
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NADEEM KHAN May 19, 2024 11:38am
The industry needs to adopt modern methods of farming, processing and marketing. First and most important gather the DATA. in Pakistan everything is on heresay basis.
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M Anwar Khan May 19, 2024 06:06pm
@Aam Aadmi,
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Az_Iz May 19, 2024 10:04pm
The country has one of the largest livestock population in the world. And opportunity comes knocking.Raise the standards to internationally accepted ones,and grow the exports.
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Syed Murad Ali Shah May 20, 2024 02:14am
@Bilal, would you like to share your contact info?
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Usman May 20, 2024 08:37am
@Aam Aadmi, the whole pti would have to be exported except imran khan than.so not a good idea.
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Bilal May 26, 2024 10:17am
@Syed Murad Ali Shah , Email: [email protected]
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