Pakistan’s Poultry Sector Hits an All-Time Low in 2019

This year has turned out to be another low-growth year for Pakistan’s poultry sector, which is at its all-time low, owing to various tax anomalies and an unfavorable export environment.

Pakistan failed to leave its mark in the $3.7 trillion international Halal food market. Due to unjustified taxation policies, the poultry industry was able to process less than 5 percent of the total broilers produced this year despite being the world’s 9th largest chicken-producing nation with about 1.2 million broilers produced in 2019.

On the other hand, the rest of the world’s major broiler producers and countries with a marginal poultry production process more than 95 percent of the total broilers produced.

To make things worse, finished poultry products under the FTA with Malaysia are imported in Pakistan with no import duty or sales tax and from China at a preferential rate of 10 percent customs duty. In contrast, the Pakistan government has imposed a heavy customs duty, sales tax and additional regulatory duties on the import of raw materials for producing poultry feed and for processed, value-added chicken products, thus making it impossible for local poultry producers to compete in the international poultry market.

To restrict the import of value-added poultry products, the government must immediately impose a regulatory duty of at least 40 percent on imports of finished products, processed chicken and tab eggs. This will give the poultry exporters space they require for growth.

Furthermore, conditions (a), (b) and (c) of Para 4 of SRO 711(1)/2018 dated June 8, 2018, should be amended to provide 4% drawback to poultry exporters, while there should be no condition of giving 2 percent initially and another 2 percent on achieving 10 percent growth in exports in subsequent years.

To curb illegal imports, global chicken importers must comply with Pakistan’s Halal Standards, and every consignment of poultry product reaching Pakistan must be accompanied by a certificate issued and authenticated by the Halal Regulatory Authority nominated by the importing country. This practice is quite common in other Muslim countries.