The news coming out of Q Block these days is full of contradictions. On December 17, the Prime Minister and the Chief of Defence Forces received a detailed briefing on the state of the economy. The main agenda item was getting rid of Pakistan’s addiction to the IMF.
With the ongoing bailout programme set to end in September 2027, the civil-military leadership seems unified in wanting to get this particular monkey off their backs. And why wouldn’t they? Pressure from different industries has been mounting to cut interest rates and ease trade restrictions. Economic governance in the country is little more than paper pushing the directives of the Fund these days.
But the government will not have a viable path out of the quagmire of the IMF unless it can somehow increase exports. Ahsan Iqbal, in his press conference after the briefing, did not mince his words: Pakistan would need to increase its exports by $20 billion in the next four years to $63 billion if it had any chance of making do without the IMF.
The only problem is that Pakistan’s exports have been decreasing in recent times. During the July-November period, exports reduced by over 6% instead of showing any growth. The textile industry, which makes up Pakistan’s largest export sector with nearly 60% of total exports, has recorded four straight months of declining exports. The government likes to talk a big game about increasing exports, but most of what they say is hot air filled with ridiculously outdated terms such as “breaking the begging bowl” and “roadmaps.”
The government’s actions massively contradict their words. If exports really are the number one priority in Pakistan, then why did a transporters’ strike caused by hefty traffic fines cause trade at the Karachi port to basically come to a grinding halt for more than ten days? Textile exporters have already received notices from foreign clients informing them they will have to find alternatives to Pakistani companies.
This attitude is pervasive in all corners of government. That is why one does not hold very high hopes for the recently approved Halal Meat Export Policy. A day after the all-important briefing, the PM approved the policy and directed relevant authorities to present a comprehensive, three-year strategy within two weeks, comprising measures to increase exports.
Pakistan is the world’s 10th largest producer of meat, with more than 5.2 million tonnes of meat produced annually. However, on the list of exporters, Pakistan only holds a 0.4% share of the total global market. While this is a very small portion of a global market worth $3 trillion, within Pakistan the significance of meat exports has slowly been growing — particularly in the GCC markets.
Last year, Pakistan exported close to 130,000 tonnes of meat. Most of this went to the GCC because Pakistan is uniquely poised to provide halal meat. However, opportunities have been opening up with some Pakistani companies entering the Chinese market. Meat, it seems, can be one of a number of products that can help Pakistan achieve its export needs, but only if it is given the necessary environment.
Pakistan’s meat production
Pakistan produced around 5.809 million metric tons of meat in 2024, including 2.630 million metric tons of beef, 2.362 million metric tons of poultry meat, and 0.817 million metric tons of mutton.
Most of the animals in Pakistan are slaughtered at unregistered and unregulated slaughter slabs, slaughterhouses, 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.
For exports, meat has to be prepared and stored in very specific facilities. These are severely lacking in Pakistan. The country has 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 slaughterhouses. 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.
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, controlling 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.
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.
The roadblocks
But meat exports have some serious problems in Pakistan. 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.
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 the 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 neighbouring 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.
The TOMC model — expanding beyond the GCC
There are some examples in Pakistan that are worth emulating. 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 endeavour 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 into 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.
So what do we do?
To truly unlock the potential of Pakistan’s meat industry, the government must focus on key areas that can create an environment conducive to growth. First, the government should establish financing opportunities for meat processors and exporters to upgrade their facilities and improve production capacity. Grants or low-interest loans could be provided for the establishment of modern slaughterhouses with necessary equipment to meet international standards.
Second, the creation of proper storage and cold chain facilities is crucial for both fresh and frozen meat. The government must incentivize the private sector to build modern, temperature-controlled storage facilities to ensure that the meat remains fresh and reaches international markets in optimal condition.
Third, diplomatic support must be strengthened to open new markets, especially those that require stringent health and safety standards, such as the European Union, the United States, and Japan. Bilateral trade agreements should include clauses that provide preferential access for Pakistan’s meat products while addressing FMD concerns through joint vaccination programmes and increased veterinary support.
Finally, the government should streamline the process of doing business for meat exporters by simplifying regulations, reducing bureaucratic hurdles, and providing incentives for producers to formalize their operations. It is only through these concrete actions that Pakistan can genuinely start to compete in the global meat export market and achieve the necessary export growth to break free from reliance on IMF assistance.
