Costs Too High in Pakistan for Exports to Saudi Arabia

PAKISTAN - Because of high production costs in Pakistan, local producers are unlikely to benefit from the end of Saudi Arabia's ban on its poultry products.
calendar icon 4 June 2009
clock icon 3 minute read

The recent decision by the Saudi government to lift ban on import of poultry related products from Pakistan is unlikely to give any major benefit to the poultry sector of the country due to higher cost of production as compared to other major exporters across the globe, according to Daily Times of Pakistan.

Saudi Arabia has recently announced lifting of ban on import of all kinds of poultry products from Pakistan, which has rekindled hope among poultry related traders for rejuvenation of the declining sector.

However, in the wake of higher cost of production, local farmers and growers find themselves at a disadvantageous position as they do not stand a chance against the leading poultry exporters of the globe including Brazil, Holland, Thailand and other European countries.

Central convener of the Pakistan Poultry Association (PPA), Abdul Maroof Siddiqui, said that during the last year, unprecedented increase in production cost of poultry has resulted in negative repercussions for its export likelihood.

It costs 70 to 75 rupees (PKR) to produce a live chicken bird weighing around one kilogramme while Brazil, considered as one of the leading exporters of chicken meat, is exporting the chicken meat commodity to Afghanistan, Saudi Arabia, Kuwait, Bahrain, Dubai and other countries of the region at around PKR 60 65 per kilo.

"The wide price difference between both products clearly manifests drawback faced by the local producers rendering them at a weakening position," he added.

Highlighting a host of factors responsible for inflated prices of poultry products especially chicken meat, Mr Siddiqui told Daily Times that one of the major ingredients of poultry feed is soybean, which constitutes 10 to 15 per cent of the total feed and is imported by feed manufacturers from India at higher cost.

Similarly maize, which constitutes 35 to 40 per cent of the total feed, has also sharply gone up in price over the period of time, pushing up the total feed cost.

Similarly the cost of rice, which is also regarded as one of the vital part of the poultry feed, remains high for the last eight to nine months, which is adding to the overall cost.

Replying to a question, he said the other major factor contributing to the high cost of production is frequent upward revision in electricity charges by the federal government pushing growers and farmers of the poultry industry on the verge of despair.

He said told Daily Times that until the government does not provide substantial incentives to the local poultry sector and exporters related with this field, prospects for this sector would remain bleak.

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