ISLAMABAD, April 19 : A recent report issued by Pakistan Business Council identifies various issues for redressal to enable Pakistani livestock traders to capture a significant portion of the $8.2 billion bovine meat market next door.
According to Gwadar Pro, the report, “Scaling up bovine meat exports of Pakistan”, presents a sectoral review of livestock trade and meat processing in Pakistan.
It notes that China imported $8.2 billion worth of bovine meat in 2019, but Pakistan had no share in this huge market despite geographical proximity and concessions offered by the Chinese government.
The report states that Pakistan could not take advantage of the enormous Chinese markets as it lacked quality and phytosanitary standards. It also mentioned that the prevalence of foot and mouth disease (FMD) in animals was another barrier for Pakistan to venture into the Chinese beef market.
Interestingly, only a couple of weeks ago, China granted a license to the first ever Pakistani company to export heat-processed meat into China. The Organic Meat Company, a Karachi-based firm, obtained the license after it had the latest plant to eliminate the FMD virus in meat via heat. The facility was also installed by Chinese experts.
The report states that the Pakistani government is, however, undertaking a vaccination programme and making an animal quarantine zone in the desert of Cholistan to address the FMD issue.
This way, Pakistan is expected to move from the World Organisation for Animal Health (OIE)’s Stage-2 category for countries (in which FMD is reduced to target areas) to Stage-3.
In the third stage, the FMD virus is curtailed via an organised national Official Control Program. “Once Pakistan achieves the Stage-3 status, the opportunity to export beef to larger markets like China will open up”, the report states.
Access to the Chinese market will provide Pakistan with a good opportunity to enter a large market in future. China has granted Pakistan duty-free access to bovine meat under China-Pakistan Free Trade Agreement–II (CPFTA-II) in 5 of the 6 categories, the report stated.
China applies a 13% Value-Added Tax on imports of beef products. For WTO member countries, the most-favoured nation duty rates range from 25% for frozen carcasses to 12% for most beef products and offal.
But Pakistan has a significant duty advantage over other competitors, except for the fresh bovine carcasses, it has duty-free access to the Chinese market for the rest of categories, the report says.
There is a high market potential for Pakistan in China. With rising income levels, consumption of bovine meat will keep increasing in China. Moreover, due to the outbreak of African Swine Fever in China, the domestic production of pork fell which encouraged substitution to beef.
The domestic production of beef in China is unable to keep up with the rise in domestic demand, which provides Pakistan with an opportunity for market expansion, the report concludes.
It is relevant to mention here that in March, the Chinese Counsellor General at Karachi Libijian invited Pakistan livestock traders to take advantage of the Chinese market. He had assured his full support in this regard and had also pointed out the enormous opportunities for Pakistani exporters under the upgraded China-Pakistan Free Trade Agreement.
Pakistan Business Council is a business advocacy body backed by 86 of the largest local and multinational investors in Pakistan.