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Export Potential of Halal Food Industries

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3.1 Total Exports and Share of Halal Food

As per authentic statistics of Economic-Survey of Pakistan 2013-14, total exports of the country during July 2013-Apr 2014 were USD 20.997 billion[1] whereas total imports were USD 37.105 billion[2]. There is no separate data available on Halal food exported during last few years. However, as per SBP report, food group exports of last two years are tabulated below:

Table-B: EXPORT RECEIPTS BY COMMODITY

           

(Thousand US Dollar)

(Thousand US Dollar)

Commodity

 

Jul-Jun

 

Aug

Jul ( R)

Aug (P)

Jul-Aug

   

FY12

FY13

FY14 (P)

FY14

FY15

FY15

FY14 P

FY15 P

A. Food Group

3,789,373

4,142,290

4,233,395

278,676

293,128

301,541

609,560

594,669

01. Rice

2,075,415

1,876,229

2,099,719

133,431

135,732

134,068

287,340

269,799

A) Basmati

1,064,366

822,420

993,794

70,169

80,177

73,809

148,448

153,986

B) Others

1,011,049

1,053,809

1,105,925

63,262

55,555

60,258

138,892

115,813

02

Fish & Fish Preparations

338,959

336,151

366,403

21,523

26,389

22,298

45,780

48,687

03

Fruits

243,107

283,758

310,131

21,059

22,484

24,788

47,553

47,271

04

Vegetables/Leguminous Vegetabl

118,904

139,980

145,909

10,989

8,589

11,287

22,927

19,876

05

Tobacco

23,170

27,842

26,077

3,886

1,015

2,265

8,485

3,279

06

Wheat Unmilled

62,344

29,702

3,197

361

0

0

1,592

0

07

Spices

37,664

41,071

56,697

2,806

2,644

5,816

6,592

8,460

08

Oil Seeds, Nuts and Kernals

27,291

49,759

69,478

2,083

1,273

1,533

3,870

2,806

09

Sugar

20,659

431,161

304,816

8,914

11,982

22,427

37,298

34,409

10

Meat and Meat Preparations

212,106

224,432

237,120

18,200

23,653

22,206

40,952

45,859

11

All Other Food Items

629,753

702,204

613,849

55,424

59,369

54,854

107,171

114,223

Legend:P: Provisional, R: Revised,Source: http://www.sbp.org.pk/ecodata/index2.asp

There are approximately 50 Halal certified companies operating in Pakistan[3]. The Al-Shaheer Corporation, PK Livestock and Zenith Associates are prominent meat exporters of the country. Meat-one, the subsidiary organization of Al-Shaheer has significantly enhanced the exports of halal food i.e. beef and mutton, particularly to Gulf countries. On the poultry side, K&N’s is a big name. It is exporting chicken to the West and also opened branch in the USA.

As per full year statistics of 2013-14, exports of more than 74,000 tonnes of meat and its products grabbed about $230m, up from about 63,000 tonnes worth $211m in 2012-13[4]. Meat is mainly exported to Saudi Arabia followed by Kuwait, UAE, Bahrain, Oman, Qatar, China and Afghanistan. Similarly, exports of milk and cream (not concentrated/sweetened) also witnessed significant growth during 2013-14 by fetching $50m in comparison with previous year figure of $20m[5]. While, the exports of concentrated or sweetened milk and cream, during 2013-14, stood at same level of $9m[6] as in 2012-13. Increasing exports and parallel rise in demand of processed milk and meat, are suggestive of sharp potential growth of both the sectors, in near future and calls for investments in dairy and meat industry.

3.2 Govt. policies for promotion of Halal products

Government of Pakistan is striving to promote Halal food industry. The government has announced that 50 percent subsidy[7] shall be provided in order to enable businessmen and producers to explore the Halal market for Pakistani products. Pakistan National Accreditation Council (PNAC) is facilitating Halal Accreditation Scheme on the pattern on OIC Halal Guidelines developed by the SMIIC for promotion of Halal products in the international market. Similarly, PSQCA has also introduced Halal Standards i.e. PS-3733: 2010 for the companies in Halal food sector and PS-4992: 2010 regarding the authorized organizations dealing with certification of Halal[8] products.

In May 2014, the Science and Technology Ministry GoP finalized the draft Bill to establish Pakistan Halal Authority (PHA) at the federal level to guide and facilitate the business of Halal products and processes. Moreover, PCSIR has recently established a state-of-the-art halal authentication laboratory at Lahore[9]. Despite passing of sufficient time, PHA Bill 2014 is still in pipeline and not approved, so far.

3.3 World Halal Assembly

On 3-4 June, 2014, first World Halal Assembly with event them “Asia-Future of World Halal Trade” organized in Islamabad. The event was hosted by PSQCA and Halal Products & Services Association of Pakistan (HAP). Over 250 scholars and expertise hailing from 40 different states attended the event[10]. At the occasion, Mr. Zahid Hamid, Federal Minister for Science & Technology, vowed to provide complete support to private sector in Pakistan to boost Halal products.

Participating scholars and dignitaries including Mr. Haluk Dag, Secretary General-SMIIC in his address underscored the importance of cooperation and coordination to accomplish the objective of ‘One Halal’ logo and ‘One Halal’ standard[11]. Global experts also shared their valuable information/ideas and discussed issues/challenges concerning with the Halal trade, certification, accreditation and marketing. Number of cooperation agreements were also signed in the gathering, which is likely to help local companies to enhance their exports of halal food items.

Section-IV: International Market of Halal Food

4.1 Size of Global Halal Food Market

The global Muslim population estimates stand at 1.8 billion[12], this represents 26 % of the total global population (6.8 billion), whereas share of worldwide halal food market is about 16 % of the aggregate food market, which means that a minimum space of at least 10 % is available to be filled by halal food companies. News story published in renowned TIME Magazine (May 2009 issue) suggests that total volume of global Halal food market[13] is worth about US$ 632.

Market size of Halal food in Europe is about $66 billion[14], with France havingthe largest share of approx.$17 billion. InUnited Kingdom, only the Halalmeat sale is worthover $600 million annually.Muslims residing in the USA spend about $13 billion on Halal food products every year. It is worth mentioning that GCC countries’ aggregate exports of Halal food is approx. $44 billion. Similarly, in the neighboring India, worth of Halal food business is about $ 21 billion, per annum[15]. Worldwide halal food market is depicted in following global map with the help of circles[16].

4.2 Stakes of Pakistan in the Global Halal Food Market

Presently, Pakistan is the second largest Muslim country in the world with population of over 180 million, while Indonesia stood at first place. But according to a news story on website of TIME magazine[17], Pakistan is likely to overtake Indonesia and become the largest Muslim nation by 2030 with expected population over of 256 million. Thus, Pakistan has to aim for leading global Halal food market in the future. Unfortunately, the current share of the country in international halal food market is mere 0.5 %[18]. Pakistan has direct access to the markets of Central Asia, Middle East. On the other hand, Pakistan is not only the 6th largest cattle breeder but also world’s leading poultry breeder. Following table depicts the unprecedented vertical growth of poultry sector in Pakistan which has outpaced other sectors of livestock.

Table C: Livestock Population in Pakistan

Growth Livestock Population (In million)

Year

 

Buffaloes

Cattle

Goats

Sheep

Poultry

1990-91

   

17.8

 

17.7

37.0

26.3

146.9

1991-92

   

18.3

 

17.7

38.7

27.4

156.2

1992-93

   

18.7

 

17.8

40.2

27.7

182.6

1993-94

   

19.2

 

17.8

42.0

28.3

250.0

1994-95

   

19.7

 

17.8

43.8

29.1

318.8

1995-96

   

20.3

 

20.4

41.2

23.5

350.0

1996-97

   

20.8

 

20.8

42.6

23.7

382.0

1997-98

   

21.4

 

21.2

44.2

23.8

276.0

1998-99

   

22.0

 

21.6

45.8

23.9

278.0

1999-00

   

22.7

 

22.0

47.4

24.1

282.0

2000-01

   

23.3

 

22.4

49.1

24.2

292.4

2001-02

   

240

 

22.8

50.9

24.4

330.0

2002-03

   

24.8

 

23.3

52.8

24.6

346.1

2003-04

   

25.5

 

23.8

54.7

24.7

352.6

2004-05

   

26.3

 

24.2

56.7

24.9

372.0

2005-06

   

27.3

 

29.6

53.8

26.5

433.8

2006-07

   

28.2

 

30.7

55.2

26.8

477.0

2007-08

   

29.0

 

31.8

56.7

27.1

518.0

2008-09

   

29.9

 

33.0

58.3

27.4

562.0

2009-10

   

30.8

 

34.3

59.9

27.8

610.0

2010-11

   

31.7

 

35.6

61.55

28.1

663.0

2011-12

   

32.7

 

36.9

63.1

28.4

721.0

2012-13

   

33.7

 

38.3

64.9

28.8

785.0

Source: Pakistan Food Journal, Nov-Dec 2013 issue.

4.3 Leading Countries of Halal Food trade

It is strange that non-Muslim nations like Brazil, France, the USA, New Zealand, Thailand, Philippines, etc. are leading the international Halal food market, whereas, Muslim countries like Malaysia, Indonesia, etc. come later in the list. Australia, Canada, Singapore, India are also known as major exporters of Halal food. With 01 million MT export of frozen Halal chicken, and 300,000 MT of Halal beef products, Brazil is the leading the Halal food market[19]. France is second major player. It exports 750,000 MT Halal frozen chickens annually to Saudi Arabia, Kuwait, UAE, etc. United States is the third largest beef exporter in the world and more than 80 percent of its frozen beef is Halal. Fourth largest beef exporter is New Zealand and 40 percent of its beef products exports are Halal[20].

4.4 Windows of Opportunities for Pakistan.

There are number of opportunities for Pakistan to grab its share in global halal market. Owing to its geo-strategic location Pakistan can easily become leader of Halal food market in the South Asia, later on, it can lead the global markets of halal food commodities. Population wise different global markets are mentioned:

Asia[21]: Number of Muslim countries are situated in Asia. In Middle-East and western parts of Asia, aggregate population of Saudi Arabia, Yemen, UAE, Syria, Iraq, Turkey, Jordon, Azerbaijan, etc. is more than 190 million. They constitute highly fertile Halal food market. In East Asia and ASEAN Market,Muslim population is more than 360 million including Indonesia (195million), China, Malaysia, Philippines, Thailand, Myanmar, etc. ASEAN countries are unique in the sense that they not only supply halal food products but import as well. For instance, Malaysia exports Halal food items to Indonesia. China possesses immense potential as a market of Halal food and local companies can focus on this untapped market, besides covering nearby countries of Indonesia and Malaysia.

Importantly, our own region i.e. South and Central Asia is thickly populated with more than 600 million Muslims (including Pakistan, India, Bangladesh, Iran, Afghanistan, Uzbekistan, Kazakhstan, Tajikistan, Turkmenistan, Kyrgyzstan, etc. It is a massive market for Halal products as food items are available in Muslim countries but without any HALAL certification.

Africa[22]: North African countries like Egypt, Algeria, Morocco, Sudan, Tunisia and Libya share population of more than 181 million Muslims. In West African nations i.e. including Nigeria,Niger, Mali, Ivory Coast, Senegal, Guinea, Ghana, etc. more than 150 million Muslims are residing. Whereas, East African countries including Ethiopia, Tanzania, Somalia, Kenya, Uganda, Mozambique, and other countries have population of more than 92 million Muslims. Similarly, Central African countries including Congo, Chad, Cameroon has Muslim demography of about 17 million. In South Africa, though Muslim population is about 1.2 million but Muslims consumers are very particular on HALAL products which creates an opening for Pakistan to harness the potential for Halal products.

Europe[23]More than 50 million Muslims are residing in different European countries like UK, France, Russia, Germany, Bosnia, Kosovo, Albania, Russia, etc. It is an important market for Halal food as consumers have high purchasing power and possess strong eager to buy those food brands which contain “Halal” logo.

North & South America[24]: Total population of Muslim residents in both Americas is about 10 million (USA 6.4m, Brazil 1m, Canada 0.8m and other countries). Muslims dwelling in the USA also possess high purchasing power and always prefer HALAL products.

Conclusion

Despite a predominant Muslim country, share of Pakistan in global Halal food market is very insignificant. Sindh province has considerable industrial base and some of the local companies are major players of Halal food market within country and export their products as well. However, a lot of potential in international Halal food trade is yet to be harnessed by local business organizations. Absence of central Halal food authority to guide and channelize the Halal food business is primary hurdle in promotion of Halal food exports throughout the world.

It is strange that non-Muslim nations like Brazil, France, USA, New Zealand, etc. are currently leading the market of Halal products. There are number of potential markets which can be focused by local businessmen for exporting Halal food items. Pakistan falls at 6th rank in the growth of livestock, however, lack of necessary infrastructure and seriousness of investors has resulted into very low exports. The existing problem of negative trade balance of Pakistan can easily be addressed by focusing on Halal food markets and making local products equally compatible in the international market. There is need of structured approach of the rulers to carryout detailed study in global Halal industry and promote it, which would result into not only boosting of exports but also allied benefits like provision of employment opportunities.

Recommendations

  1. The pending bill of Pakistan Halal Authority has to be converted into implementable legislation, at the earliest.
  2. Government of Pakistan has to devise short term and long vision plans for converting the country into hub of global Halal food market. In this regard, Vision-Halal 2020, as well as Vision-Hub of Halal-2030 as short and long term plans to achieve the goals like attaining significant space in international market by 2020 and then journey to become global leader of Halal food by 2030.
  3. Halal Certification bodies are to be established in line with international standards of Halal food and to meet the standard of hygiene food for western world.
  4. The Government has to extend financial and technical help to producers and encourage the local businessmen to participate in international exhibitions where they not only find buyers for their Halal products but also learn from the experience of established producers and suppliers of Halal products.
  5. Establishment of Halal food export zones in Sindh province, with tax rebates is need of the hour.
  6. In order to boost Halal food exports, the government will have to make investment in dairy farming infrastructure, cold chain and veterinary services and farm management systems.
  7. Private Banks can also introduce new financing schemes to encourage the Halal food industry throughout the country.
  8. Public-Private Partnership schemes in Halal food sector aiming at export of the value added products would also provide an impetus to the food industry.

[1] Economic Survey of Pakistan 2013-14, Page 117

[2] Economic Survey of Pakistan 2013-14, Page 119

[3] Interview with Mr. Akram Khan, of HIRCP, dated 12.09.2014

[4] http://www.dawn.com/news/1130468 (accessed on 15.09.2014)

[5] ibid

[6] ibid

[7] http://www.pnac.org.pk/index.php?PageId=110 (accessed on 01.10.2014)

[8] http://www.pakistantoday.com.pk/2014/05/08/business/bill-drafted-to-establish-pakistan-halal-authority/ (accessed on 01.10.2014)

[9] Ibid.

[10] http://halalfocus.net/pakistan-oic-smiic-world-halal-assembly/ (accessed on 01.10.2014)

[11] Ibid.

[12] http://www.pnac.org.pk/index.php?PageId=110 (accessed on 07.10.2014)

[13] http://www.halalpakistan.com/html/halal_market.htm (accessed on 07.10.2014)

[14] Ibid.

[15] Ibid.

[16] Global Halal Food Industry Guide to tapping the fast growing Halal Food Market, Singapore (SPRING 2011), 06.

[17] http://newsfeed.time.com/2011/01/27/2-2-billion-worlds-muslim-population-doubles/ (accessed on 25.10.2014)

[18] http://nation.com.pk/business/24-Mar-2014/pakistan-shares-0-5pc-only-in-halal-food-market-zahid (accessed on 07.10.2014)

[19] Ibid.

[20] Ibid.

[21] http://www.halalpakistan.com/html/halal_market.htm (accessed on 08.10.2014)

[22] Ibid.

[23] Ibid.

[24] Ibid.


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