June 5, 2009

Recent decision by Saudi Arabia to lift its ban on poultry imports from Pakistan may not give significant benefits to the industry which is suffering from a production cost that is higher compared to other countries.

The lifting of the ban has rekindled hope in poultry traders for a rejuvenation of the ailing industry in Pakistan.

But higher production costs have placed local farmers at a disadvantageous position as they struggle to compete with rival countries such as Brazil and Thailand.

Unprecedented increase in production costs during the past one year has resulted in negative consequences for export likelihood, according to Central Convener Pakistan Poultry Association (PPA) Abdul Maroof Siddiqui.

Raising a live chicken weighing around one kg costs PKR70-PKR75 in Pakistan, while Brazil is exporting poultry meat to the Middle East region at around PKR60-PKR65 per kg.

The large price difference manifests drawback faced by the local producers, putting them at a weak position, Siddiqui said.

Siddiqui said total feed costs have been pushed up because soy is imported from India at a higher cost while corn prices have also increased sharply. Prices of rice, which is also used for feed in Pakistan, have remained high for the past eight to nine months. High electricity charges are also contributory to the industry's problems, Siddiqui said.

Prospects for the industry will remain bleak if the government does not provide substantial incentives to the industry and exporters, he added.

US$1 = PKR80.4507 (Jun 5)