FTAs with China, Malaysia damaging Pakistan's poultry industry

by Editor fleischwirtschaft.com
Friday, May 02, 2014
Photo: BettinaF / pixelio.de

Free Trade Agreements signed with Malaysia as well as China, without taking the real stakeholders onboard, are damaging the local poultry industry in Pakistan.

The imports of processed chicken products under FTA with Malaysia are subject to 0% import duty and from China at 16% import duty. On the other hand, local processors are unable to export their products to these countries as they are absolutely uncompetitive owing to hosts of reasons, industry experts said.

Pakistan Poultry Association North Zone chairman Raza Mehmood Khursand observed that presently Pakistan's normal import duty on import of chicken is only 25% against India, which has slapped 100% import duty on chicken to protect its local industry.

Chicken processing is the need of the day but Pakistan is processing just 3 to 4% poultry while 90% of the poultry is sold as raw.

Brazil is a competitor

He said that the Brazilian Poultry industry, which is very competitive due to less cost, is also focusing Pakistan for its poultry products export. Pakistan has approved the import of chicken meat from Brazil - currently the largest exporter of halal chicken in the world.

The government will have to impose 100% duty on import of chicken products from any country in line with the Indian government, as it does not violate WTO rules, he pointed out. K&N CEO and Pakistan Poultry Association Senior Vice Chairman Khalil Sattar suggested that Pakistan should enter into Free Trade Agreements and Preferential Trade Agreements with only those countries where it has a clear and mutual competitive advantage.

That local cost of production is already high on account of electricity and gas outages and prevalence of epidemic diseases on account of lack of regulations, coupled with import duties on inputs, making the local production uncompetitive.

Halal food shows a growing demand

Pakistan, being predominantly a Muslim country, stands to benefit from growing demand of Halal food world over. Even restaurants like McDonalds, Subway, KFC, etc. are offering Halal products in Europe, USA, Canada, Thailand and other parts of the world.

Khalil Sattar, who has recently celebrated 50th anniversary in poultry industry, said that until the signing of FTAs, no imports of processed value added chicken products was taking place. He proposed that until international community's regulations requirements are fulfilled, no further FTAs be signed which include processed chicken meat and its value added products.

Pakistan is the only country in the world that has an absolute open door policy. No questions asked; one can import from anywhere in the world, he said. The industry experts asked the government that all impediments which increase the cost such as lower capacity utilisation, import duties on inputs, lack of protection against imports and lack of regulations for disease identification need to be addressed for making exports feasible. Consequently, the government should restore Zero Rating to reduce cost of production, besides withdrawal of Import Duties on Inputs under specific requirements of poultry processing industry.
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