Poultry processers for reducing duty on import of raw material

LAHORE – Poultry processing industry has demanded the government to reduce duties on import of ingredients/medicines used for feed manufacturing for making the end product compatible in the global market.

“Our processed poultry products are 20-25 per cent more expensive as compared to Brazilian products”, said Salman Tariq, Director of a leading poultry processing company while talking to a group of journalists during the plant visit.

“Regulatory environment is not conducive. We have been in discussion with Ministry of Commerce to devise a strategy for subsidy to make our products competitive in the Gulf countries. We are not asking for a flat subsidy. We want subsidy for feed millers who need to pay a lot of duties and taxes on import of ingredients/medicines used for manufacturing poultry feed,” he said.

“If the government allows this, processors can easily target the Gulf countries. We are producing equally good products in comparison to the rest of the world”, he said, adding that the step could help increasing exports. He said Pakistan’s poultry industry is growing at 5-6 per cent per annum. There are five major players and then around 10-15 smaller units. Some smaller units close down, then new investment comes in and/or ownership changes and they become operational again. As for the major 5 players, all are operating at different capacities and having different market share. This is a tough business since 95% of the share is wet market. The consumer is not willing to switch to the processed chicken since there is a price differential of Rs 15-20 /kg”, he said. Products that are being processed are higher in terms of prices compared to the wet market. This is one of the reasons the customer is not inclined to buy this product. Price is a secondary issue. However, the main issue is the customer behavior where he/she goes to the wet market and gets the broiler slaughtered in person and then uses it. However, slowly and steadily people are converting from wet market to the processed market.

“I believe we are not growing in terms of exports. We have even lost Afghanistan as a potential market since they are also importing Brazilian products via Pakistan-Afghanistan transit trade.