International Egg and Poultry Review: Pakistan

PAKISTAN - This is a weekly report by the USDA's Agricultural Marketing Service (AMS), looking at international developments concerning the poultry industry. This week's report focuses on the poultry situation in Pakistan.
calendar icon 8 September 2010
clock icon 5 minute read

About 20 per cent of Pakistan, a country the size of England, has been devastated by weeks of flooding. It is estimated that about 17 million acres or upwards of 30 per cent of the Pakistan’s cultivated farmland and about 20 per cent of Pakistan’s total agricultural production has been affected or damaged by recent flooding. However surveys are still out for a final estimate on total crop and livestock losses. Millions of head of livestock (i.e. cattle, sheep, buffalo, goats, donkeys, chickens, etc.) have been killed or threatened due to the flooding. Thousands of farmers have been forced to leave their livestock fleeing for their own lives. Additionally, Pakistan has suffered significant damage to its infrastructure (i.e. roads, bridges, agricultural irrigation systems, etc.).

Flooding has devastated the provinces of Sindh, Punjab, and Khyber Pakhtunkhwa. Sindh and Punjab are the country’s main agricultural provinces. Agriculture is the backbone of Pakistan with about 66 per cent of the country’s citizens employed by the agricultural sector (1.5 million jobs in poultry). In Pakistan livestock is not only a source of meat and milk but it is a source of cash flow in hard times. Livestock makes up half of the agricultural GDP. In 2010, Pakistan was projected to see a GDP of 4.5 per cent, however due to recent flooding and insurmountable losses Pakistan is expected to have a growth rate of 0 per cent. The country had an economic growth rate of 4.1 per cent in 2009.

The United Nations Foreign Agricultural Organization has asked for $5.7 million USD in emergency aid for feed and medicine relief for livestock. FAO has mobilized about $1.4 million USD for feedstuffs and will be asking for more in the future. The country is still surveying its feed availability in order to determine its position and its needs. From there Pakistan will then need to assess its transportation issues. About thirty countries have responded offering up $700 million USD in relief with the Asian Development Bank offering Pakistan $2 billion USD in emergency loans.

Pakistan’s commercial poultry industry began in 1964 in cities such as Karachi, Lahore, Faislabad, Rawalpandi, and Hyderabad. According to the PPA, poultry meat production makes up about 19 per cent of Pakistan’s total meat production and has an annual growth rate of 8-10 per cent annually. Due to various government supports over the years (i.e. total or partial import duty exemptions, sales tax, income tax holidays, and approval to export at subsidized rates for table eggs, day old chicks, and broilers) the industry had prospered year to year. However Pakistan has experienced setbacks such as changes in government policies, low economic returns or products, substandard and costly feeds, an inefficient marketing system, a costly and inefficient distribution system, disease (i.e. Avian Influenza 1994, 2003, 2004, 2008), and other natural causes. On a side note, Pakistan’s breeder population is considered to be among the top 10 poultry industries worldwide.

Earlier in 2010, Pakistan’s chicken meat prices were starting to decline as industry was finally showing signs of recovery from the negative impacts suffered from avian influenza in 2008. Pakistan lost about 40 per cent of its poultry industry due to decreased chicken sales and high feed prices resulting from the 2008 outbreaks. Representatives from Pakistan’s poultry industry are worried about supplies and fulfilling consumer needs during this holy month of Ramadan (i.e. 10 August - 9 September 2010) when chicken demand is at one of its strongest points. Chicken meat prices are expected to rise due to expected supply shortages resulting from the recent flooding.

Prior to the flooding, Pakistan was looking at ways to become more competitive in the export marketplace, especially in the Halal marketplace to countries in the Middle East. Pakistan had been seeking Malaysia’s expertise and technology in slaughtering, processing, and commercial marketing. However Pakistan needs to make some significant improvements in efficiency and modernization of its technology, marketing, and transportation systems.

On side note, the Competition Commission of Pakistan (CCP) issued a Show Cause Notice to the Pakistan Poultry Association (PPA) in July 2010. After being prompted by numerous consumer complaints the CCP conducted a raid of the Pakistan poultry Association’s (PPA) offices in Islamabad, Lahore, and Karachi. Upon investigation of impounded documents and other information the CCP found that the PPA had been serving as a hub for the various sectors (i.e. hatcheries, feed manufacturers, breeders, broiler farms, layer farms, etc.) helping to control production levels and fix prices. The CCP found the PPA in violation with Section 4 of the Competition Ordinance 2010. As a result of these findings, the PPA was issued a penalty of $50 million Rupees ($577,861 USD) for operating like a cartel in August 2010.

Source: Various News Wires/United Nations Food and Agriculture Organization/Pakistan Ministry of Food, Agriculture, & Livestock/Pakistan’s Poultry Association (PPA)/USDA FAS/USDA AMS PMNA

Further Reading

- You can view the full report by clicking here.
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