Pakistan’s meat industry stands at a critical juncture, facing both significant challenges and promising opportunities. Despite being a major producer of meat, with an output of 5.809 million metric tons in 2024, the country’s export potential remains largely untapped due to structural issues plaguing the sector. These challenges range from the absence of a robust livestock traceability system to the prevalence of Foot and Mouth Disease (FMD), and from the lack of large-scale feedlots to the persistence of informal, undocumented supply chains.
However, amidst these obstacles, a ray of hope emerges in the form of Pakistan’s strategic geographical position and its growing presence in niche markets. The country has carved out a significant market share in the Gulf Cooperation Council (GCC) countries, particularly in the fresh or chilled bovine meat segment. This success, while noteworthy, also highlights the need for diversification as global meat consumption trends shift towards frozen and processed products.
The recent breakthrough of The Organic Meat Company Limited (TOMCL) in the Chinese market serves as a testament to the untapped potential of Pakistan’s meat industry. This development opens up new avenues for Pakistan’s meat sector, but does it have the potential to convert Pakistan from a regional player to a global competitor?
Structural Issues in Meat Supply
Numerous structural roadblocks hinder the growth of Pakistani meat exports. The first one is the traceability of livestock. It is an arduous task to trace animals due to the absence of a basic tagging system along with a national livestock database.
Farmers in Pakistan are not interested in meat production on a mass scale; therefore, they are reluctant to purchase expensive tags and related equipment. Moreover, the development of infrastructure for a tagging system needs substantial investment, which would increase costs of meat production significantly, leading to lower profit margins specifically for small-scale farmers who work informally.
The entire meat value chain in Pakistan is for the most part undocumented, informal and highly fragmented, governed by an archaic arthi-based system, which further complicates the task of traceability, due to the unavailability of animal sales records and history of animals like birth, vaccinations, and genetics.
Secondly, Foot and Mouth Disease (FMD) is prevalent across livestock in Pakistan due to flimsy veterinary infrastructure, which fails to cater to livestock in rural areas, where most of the livestock is concentrated. Furthermore, the lack of a national FMD control programme, scarcity of disease-free zones and inadequate ability of the government to track livestock have exacerbated the situation.
High-income markets like the United States, European Union, and Japan require meat exporting countries to demonstrate that they are a country free of FMD or have contained the spread of FMD through stringent controls, however, in case of the latter the country needs to ensure that the meat exported is only from FMD free zones and complies with food safety standards like HACCP (Hazard Analysis Critical Control Points). Since Pakistan fails to meet these standards its meat exports to these markets are minimal.
Thirdly, farmers in Pakistan only sell livestock for meat production when it is unable to work in the fields and its milk yield falls to negligible levels. Therefore, there is a dearth of large-scale feedlots or fattening farms. Furthermore, most of the country’s native breeds constitute milk breeds, which have poor feed conversion rates, resulting in low average carcass weight and low meat yields. The average carcass weight in Pakistan is 130 Kg/animal, therefore, slaughtering the buffalo would only get the farmer Rs.130,000, while an average buffalo produces milk for a decade resulting in earnings above Rs. 2.5 million for the farmer.
Lastly, we observe rampant smuggling of livestock across the border into neighboring countries, Iran and Afghanistan, which reduces its supply in the domestic market, resulting in increased prices of livestock in the country. The government imposed a complete ban on the export of live animals in July 2013 to stabilize the prices of live animals in the domestic market, however, the ban has had little to no impact on the smuggling of live animals.
Landscape of Pakistan’s Meat Exports
Although the above-mentioned structural issues impede the growth of meat exports of Pakistan, meat production for the domestic market continues at a massive scale. Pakistan produced around 5.809 million metric tons of meat in 2024, where 2.630 million metric tons of beef, 2.362 million metric tons of poultry meat, and 0.817 million metric tons of mutton were produced.
Most of the animals in Pakistan are slaughtered at unregistered and unregulated slaughter slabs, slaughter houses, and abattoirs. Such facilities typically lack hoisting facilities, a lighting system, and a regular water supply. Hygiene standards are often ignored, while both wet and solid waste disposal are poorly managed.
On the contrary, we have 34 Animal Quarantine Department approved slaughterhouses that focus on exports for international markets. These facilities encompass imported machinery along with expert labour and accredited financing. According to the Board of Investment (BOI), these facilities are estimated to be operating at 25% to 40% of their peak capacity due to insufficient livestock raised for meat production and limited access of Pakistani meat exporters to international markets. The output of these facilities could be doubled or tripled if their access to international markets is enhanced.
The export-oriented facilities follow stringent hygiene requirements and quality standards including traceability of meat, unlike unregulated slaughter houses. This increases their production costs, restricting their ability to compete in the domestic market, increase production, and diversify their portfolio, resulting in the concentration of meat exports in particular segments.
Pakistan’s meat exports are limited to only a handful of markets that permit the import of its meat despite the prevalence of FMD in its livestock. Pakistan’s export destinations are led by six GCC countries, which include the United Arab Emirates, Saudi Arabia, Qatar, Bahrain, Kuwait, and Oman. These countries account for $444 million (92.7%) of Pakistan’s total meat exports, while 88% of Pakistan’s meat exports are concentrated in the category of fresh or chilled carcasses and half carcasses for both beef and mutton, with beef and mutton representing shares of 82.3% and 17.7%, respectively.
Source: International Trade Centre
The country’s proximity to the GCC gives it a competitive advantage in supplying halal fresh and chilled carcasses at a reasonable rate to the region. Moreover, Pakistan is increasingly exporting its fresh and chilled meat to the region through sea rather than air in order to be more competitive in the segment. As per the estimates of 2021 by the Pakistan Business Council, air freight of fresh and chilled meat to the Gulf costs around $1 to $2 per Kg, while sea shipments cost only $0.2 per Kg.
Pakistan is the largest supplier of fresh or chilled bovine meat to the GCC countries, it controls a market share of around 45%. Fresh or chilled carcasses of bovine meat exported to GCC countries amounted to $348.417 million, approximately 72.7% of the total meat exports of Pakistan in 2023. Nevertheless, this moat is limited to the segment of bovine meat products that have not been processed further like carcasses, half carcasses, and cuts with bone in. Pakistan has no share in the space of boneless fresh or chilled bovine meat segment.
When it comes to frozen meat, Pakistan has limited operational capacity. Moreover, since frozen meat has a longer shelf life, it is feasible for countries to import from anywhere in the world, disarming Pakistan of its advantage of being in the vicinity of the GCC.
Source: International Trade Centre
Local meat processors in Pakistan fail to outdo their international competitors like Brazil and India due to high production costs led by high costs of animal sourcing and low meat yield. According to estimates, Pakistan’s production costs are $4/Kg for exports of frozen meat, whereas India produces the same products at $3/Kg. The price competition is even more intense in the frozen market segment.
The country managed to only export frozen meat worth $11.276 million to the GCC region and $26.954 million across the globe in 2023. Frozen bovine products amounted to 25.528 million (94.7%) out of the total and were primarily supplied in the form of carcasses and boneless meat which held shares of 51.2% and 34.8% of the total frozen bovine meat exports. Apart from that, Pakistan also managed to export frozen mutton products worth $1.426 million, which was dominated by the boneless category, making up 88.6% of the total frozen mutton exports.
Source: International Trade Centre
But why should Pakistan be worried even if its meat exports are highly concentrated in the category of fresh and chilled carcasses of bovine meat in the GCC region? Let’s find out.
The Growing Transition towards Frozen Meat
Well for starters, fresh and chilled carcasses of bovine meat is a declining market segment on a global scale, it represents only 3.8% of the total global bovine meat imports. Although Pakistan has developed a strong foothold for the category in the GCC region, the depletion of the segment on a global scale is a matter of grave concern for Pakistan.
Moreover, an emerging trend which has been observed globally is the transition of consumer demand from fresh or chilled beef to frozen beef products. The overall bovine meat segment witnessed a growth of 4.7% over the past decade but the growth of frozen bovine meat segment outpaced the growth of fresh or chilled bovine meat segment. The frozen bovine meat segment represents a share of 53.4% whereas the share of fresh or chilled bovine meat hovers around 46.6%.
Source: International Trade Centre
The global demand for bovine meat is highly concentrated in the segment of boneless meat including both fresh or chilled and frozen types, it dominates consumer demand which amounts to 82.3% of the total imports of bovine meat. On the contrary, the demand for carcasses, a segment which Pakistan has a firm grip over, represents a share of only 4.3% of the overall global bovine meat imports
This transition is led by the massive demand for frozen meat due to high population growth, rapid urbanization, and increasing per capita income in developing countries, particularly in Asia. Frozen meat products have a longer shelf life and are offered at lower prices to these price-sensitive markets which is made possible by transportation through sea at competitive rates. A conspicuous example of this phenomenon is the neighboring country of Pakistan, China, where a massive increase in demand for frozen meat products has been observed in recent history.
China’s imports of meat products mostly consist of frozen beef, which exceeded $13.4 billion in 2023, as it expanded by eleven times from 2013 to 2023. China imported around 26.735 billion of meat products from around the globe and half of them belonged to the segment of frozen beef in 2023. It imported 2.74 million metric tons of beef in 2023. Apart from this, we are also witnessing considerable demand for frozen beef emanating from East Asia and Southeast Asia.
Source: International Trade Centre
Nevertheless, the largest importers of bovine meat are China, United States, and Japan, which control market shares of 22.6%, 13.6%, and 4.7%. There has been a huge spike in meat consumption in China due to rising income levels, higher disposable income, and a flourishing middle class.
Since the country does not have the capacity to meet its domestic demand, the Chinese government is looking for trading partners to fill this demand gap. Thus, it has granted duty-free access to Pakistani meat products like fresh or chilled bovine meat, frozen bovine meat, and processed meat products such as heat-treated meat under the China-Pakistan Free Trade Agreement II (CPFTA-II). However, the rigorous quality regulations and stringent phytosanitary standards make it unpragmatic for Pakistani companies to export meat to China.
Pakistan’s meat exports have immense potential for growth as the country is strategically located in proximity to huge markets like China, East Asia, Central Asia, and the Gulf, where demand for frozen bovine meat products is increasing rapidly.
TOMCL seizes the Chinese opportunity
Although Pakistan has historically struggled to enter the Chinese meat market, the Organic Meat Company Limited (TOMCL), a publicly listed company involved in the processing, sale and export of halal meat and related products succeeded recently. TOMCL became the first Pakistani company to be granted approval by the General Administration of Customs China in October 2023 and managed to ink a contract of $12 million to export frozen cooked beef meat to China in 2024. Its initial consignments of frozen cooked beef meat have received positive reviews. The exports to China accounted for 2.1% of the total revenue of the company during 9MFY24.
It is indeed a significant development as the company’s revenue stood at only $22.89 million in 2023. This endeavor will not only allow the company to scale its business verticals but also enable it to establish its footprint in an international market like China which has a growing demand for frozen cooked beef meat products. This partnership perfectly aligns with Pakistan’s meat export strategy and the company’s vision of diversifying its meat products and expanding into new markets.
Assuming the company’s entrance in China will enable it to continue its growth in exports and local sales at breakneck speed which would have slowed down otherwise, the company’s revenue and net income are expected to reach Rs. 32.6 billion and Rs.1.1 billion by 2029.
The company firmly believes that this endeavor will generate healthy returns for its shareholders and it has proven to be true thus far as it has provided a return of 50.4% since the beginning of the year when this news was disseminated.
The company has also augmented the production capacity of frozen cooked beef meat by 300 Metric Tons (MT) per month. The company invested a colossal amount of Rs. 600 million to expand its meat chilling and freezing capacities to fulfil the demand of heat-treated/cooked frozen beef meat products from China.
TOMCL is the largest exporter of frozen cooked beef meat to China and one of the only two South Asian companies which have been granted a license by China to export frozen cooked beef meat to its territory The company exports meat products to 18 markets around the globe, where most of its exports are destined for middle eastern countries. However, it has also commenced the supply of pet food material to the US and Europe. Moreover, the company has a decent presence in the Far East, Commonwealth of Independent States (CIS) and South Asian markets. The distribution of company’s meat products by volume is given below.
Source: International Trade Centre
All in all, the Chinese market presents a mouth-watering opportunity for Pakistani meat exporters. However, a conducive environment for export-oriented meat processing plants needs to be harnessed through the development of a holistic national vision for upgrading the processes of the meat industry. This would not only boost exports but also enable the domestic market to flourish as well. Moreover, meaningful investments need to be made in the industry to raise the standards of Pakistani meat, introduce innovation and diversify meat products, which would allow the country to cash in on this huge opportunity.
