A State-Owned Saudi livestock firm, whose chief visited Pakistan last month, has shown interest in investing in the country’s production of red meat because of its high quality.

Abdullah Al-Dubaikhi, president of Saudi Agricultural and Livestock Investment Company, which was created by the Saudi government during the food crisis of 2008 to ensure food security to its citizens, told Pakistani meat exporters during a meeting arranged by the Punjab Board of Investment and Trade that what determines his country’s selection of meat for import was its shape and taste and incidentally the Saudis like the taste of Pakistani red meat.

But how far our meat exporters can avail themselves of this opportunity of enlarging their market in Saudi Arabia is anybody’s guess because the still rampant incidence of power breakdowns. This single factor has already spoiled the country’s investment scenario by curtailing production capacity of meat processing units by at least 50 per cent. As a result, Pakistani abattoirs are also operating under capacity. In 2012-13, Pakistan earned $214.5 million from the export of processed meat which can be doubled if the fuel problem is solved.

Another inhibiting factor is the recent fall in global meat prices. According to Lahore Chamber’s panel on meat exports, Pakistani red meat is fetching 10-15 per cent less price in the international market. The price of mutton has declined to $6.70-$6.80 per kg, from $7.40 per kg, and of beef to $3.80 per kg from $4.40 per kg. Because of this, the abattoirs whose processing capacity is around 25,000 tons of meat per day are working at 40-45 per cent of that capacity.

Still, Pakistani meat claims 20 cents more over the Indian meat because of its better quality. But Indian exporters are able to compete with Pakistani exporters due to subsidies they get from their government.

Nasib Ahmad Saifi, a leading meat exporter and chairman of the LCCI’s standing committee on halal meat exports, has drawn government’s attention to the offer of a German firm for providing 0.5 megawatts of electricity to the meat sector, through compression of biogas using latest technology. Raw material for biogas, he pointed out, is produced in abundant quantity in the country’s abattoirs themselves but most of it is going waste.

But since its cost is too prohibitive (Rs80-90 million), he has asked the government to share half of the expenses as a gesture of support to the meat industry. This project can allegedly ensure power and gas supply to factories for a long period and thus substantially increase meat exports. Pakistan, he says, can achieve $5-$6 billion exports in the next five years if the government works out a comprehensive policy for promotion of meat industry.

Needless to emphasise, the meat processing firms need continuous supply of electricity to keep their units operational to fulfill export orders within the given timeframe. But owing to power outages, export commitments were not being met or were not up to the mark. Because of this, Pakistan has already its share in some foreign markets.

Meat products, when carrying the tag of ‘halal’, suddenly become fast-moving items in countries where Muslims are in minority. Its market is growing rapidly throughout the world. But Pakistan has yet to create a place for itself in the halal meat market. Incidentally, no Muslim country appears in the list of first ten meat exporters.

Another problem Pakistan faces is the failure of most of its meat companies to meet the strict safety codes of importing countries. The government has started the process of getting formal recognition as a halal meat exporting country from the importing countries particularly those in the European Union and the Gulf states.

With effect from last October, the export of live animals has been subjected to restrictions. The decision to allow export of live animals was taken by the Economic Coordination Committee of the Cabinet in March 2009, as a result of which, around 275,000 cattle and 232,424 sheep and goats were exported to various countries in the last four years.

The export of processed meat is more profitable than the export of live animals, as it fetches better prices and provides precious by-products such as hides, bones, blood and tallow to many associated industries in the country.

Livestock, which includes both, animal population and their products, contributed 55.4 per cent value addition to the agriculture, and 11.9 per cent to the GDP in 2012-13, against 55.3 per cent and 11.9 per cent respectively a year ago. The major products of livestock are milk and meat. The milk production increased by 3.2 per cent and meat by 4.5 per cent during 2012-13 as compared to the corresponding period last year.