High taxes a hurdle to poultry sector growth

Pakistan’s poultry processing industry can tap the international market provided its prices are brought down by compensating against the taxes and duties being paid on ingredients and medicines imported by feed millers for the manufacturing of feed.

Currently, exports are haphazard and negligible as the industry is uncompetitive as compared to Brazil.

“We are 20-25% more expensive than Brazilian products,” said Salman Tariq, Director of a leading poultry processing unit while talking to representatives of the Agricultural Journalists Association.

“Regulatory environment is not conducive at all and we have been in discussion with the Ministry of Commerce and the Trade Development Authority of Pakistan (TDAP) for devising a strategy with the poultry processors for the provision of subsidy so that we become competitive with the Brazilian products in Gulf countries,” he said.

“We are not asking the government to give us a flat subsidy, but are instead highlighting that the poultry feed millers pay a hefty amount in duties and taxes on the import of ingredients/ medicines for the manufacturing of poultry feed.

“If the government allows this, the processors can easily target Gulf countries and our exports can increase since the products we are producing are equally good like the rest of the world,” he emphasised.

The company director said that the processors had about 5% share in Pakistan’s poultry industry, which was growing at 5-6% per annum.

Prices of products being produced at the poultry processing plants are higher compared to the wet market.

This is one of the reasons consumers are not inclined to buy such products. “I believe we are not growing in terms of exports,” he said, adding, “Even though we could export to Saudi Arabia, the UAE and some other Gulf states, our competition is with Brazil and our products are at least 2025% more expensive than the Brazilian products.”

“We have even lost Afghanistan as a potential market since it is also importing Brazilian products through Pakistan-Afghanistan transit trade facility. At present, only some companies can export their processed food to Gulf countries which include Saudi Arabia, the UAE, Qatar, Bahrain and Oman,” he said.