May 10, 2011

 

Pakistan to rise in global meat trade

 

 

Pakistan has begun taking the first steps towards becoming a major player in the global red meat trade industry, in which the country has a strong competitive advantage.

 

However, Pakistan faces infrastructure shortcomings which may hinder the ability of Pakistani businesses to effectively compete against firms from Australia, Brazil, and India.

 

Yet in the last few years, a new breed of Pakistani companies has emerged, confronting the challenges of agribusiness in the country. The halal food market, at just over US$640 billion a year worldwide, is one of the largest opportunities in the food and agribusiness sector.

 

Halal meat is also one of the fastest growing segments within the global food trade. Between 2001-09, the global beef trade grew at an average of 10.4% to reach just over US$30 billion, according to data available from the UN Food and Agriculture Organisation (FAO). However, the market for halal beef imports in the Middle East and Southeast Asia alone grew by over 18.2% to reach just under US$2 billion a year during that same period.

 

Pakistan's market share within this rapidly growing market is a small 2.9%. However, Pakistani exporters seem determined, as in the six years ending in 2009, red meat exports have risen by an average of 68.6% a year.

 

With the advent of new players and government support, Pakistan is on the way to becoming one of the largest meat trade players, especially within the Middle East and Southeast Asia.

 

Iran seems to be keen for Pakistani beef. The Iranian government has invested 50% of the capital in the Lahore Meat Company, a dedicated abattoir that exports meat to Iran.

 

Australian beef has a specific niche market that industry experts believe will be difficult for Pakistan to compete with in the medium term.

 

India has placed itself outside the global beef market after a 2005 Indian Supreme Court ruling that upheld a ban on cow slaughter as constitutional. Indian exporters only sell carabeef, meat from buffalo which is considered inferior and commands lower prices. Nevertheless, Indian exporters dominate the market in Malaysia for the lower end of beef, while Australian exporters command the higher end.

 

Companies such as the OMC and the Al Shaheer Corporation have successfully begun exporting to the Middle East and are aggressively seeking regulatory approvals for markets further afield in Southeast Asia.

 

Pakistan's total meat exports may come close to US$100 million in 2011 and could surpass the US$500 million mark in about five years, according to projections by ASI Partners.