KARACHI: Exports of meat and its preparations may not increase this year despite incentives announced by the government in budget 2015-16.

In order to encourage new investments in the halal meat production and increase the use of modern technology in this sector, companies which set up ‘halal’ meat production plants and obtain ‘halal’ certification by December 31, 2016 are allowed exemption from income tax for four years from the date of setup.

“In the light of above incentives, I think the exports this fiscal year will stay almost the same,” said PK Livestock and Meat Company Managing Director Tariq Mehmood Butt while talking to Dawn.

He added that relief is being provided to new entrants and customs duty has been waived off over the import of machinery and equipment with a life span of over 15-20 years.

“It is the quarantine fee which increases the cost and should be waived off,” he said.

According to the Pakistan Economic Survey (PES) 2014-15, meat and livestock population has showed positive growth. Beef production rose to 1,951,000 tonnes in 2014-15 from 1,887,000 in 2013-14 and 1,829,000 in 2012-13.

Mutton production also rose to 671,000 tonnes in 2014-15 from 657,000 tonnes in 2013-14 and 643,000 tonnes in 2012-13.

However, Pakistan’s share in the $1 trillion global halal food market remains a pittance so far.

Answering a query whether the budgetary measures are enough to lure new investment, Butt said, “We have not yet received any notification regarding the exemptions or waivers”.

He recalled that earlier similar announcements were made but they were not implemented.

Pakistan’s overall meat exports remained static at 68,000 tonnes in July-May 2014-15 as compared to same period last year with slight difference in value. Exports were going strong in previous years. Meat exports went up to 74,289 tonnes ($230 million) in 2013-14 as compared to 62,882 tonnes ($211m) in 2012-13.

Main destinations of Pakistan’s meat exports are Jeddah, Damam, Riyadh, Kuwait, Bahrain, Dubai, Muscat and Qatar.

On the challenges being faced by Pakistani exporters in world markets, he said a major issue was the behaviour of the national carrier. It is worth noting that fresh meat is exported via air-freight.

“The Pakistan International Airlines (PIA) is not ethical when it comes to business practices, leaving exporters with no option but to work with foreign carriers. This increases the freight rates and renders us almost uncompetitive on the international market,” he said.

Meat merchants always blame rising domestic prices to higher exports of meat and smuggling of livestock, Butt said. “There is no regulatory authority to control meat prices in the local market and the merchants set their own prices which vary from city to city.”

There are 25-30 meat exporters and half of them also run their own slaughterhouses.

Importantly, he said, the prices of offals as well as skin also affect the price of meat.

Currently the prices of skin of beef animals have dropped from Rs6,200 to Rs2,500 which should make meat prices fall down by Rs30 per kg.

The same reason exists for mutton. Exports of meat and smuggling do not affect the prices of meat as there is an abundance of meat animals in Pakistan.

Goat production went up to 68.4m in 2014-15 from 66.6m in 2013-14 and 64.9m in 2012-13. Buffalo production jumped to 35.6m from 34.6m in 2013-14 and 33.7m in 2012-13. Cattle production, which was 38.3m in 2012-13, rose to 39.7m in 2013-14 and 41.2m in 2014-15.

Published in Dawn, July 3rd, 2015

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