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PAKISTAN - Free Trade Agreements (FTAs) signed with Malaysia as
well as China, without taking the real stakeholders onboard, are
damaging the local poultry industry, as imports of processed chicken
products under FTA with Malaysia are subject to zero per cent import
duty and from China at 16 per cent import duty.
According to The Nation,
on the other hand, local processors are unable to export their products
to these countries as they are absolutely uncompetitive owing to hosts
of reasons, industry experts said.
“If imports are not checked immediately, the entire poultry industry
in general and the emerging poultry sector in particular will suffer a
serious setback, they warned.
Pakistan Poultry Association North Zone chairman Raza Mehmood
Khursand observed that presently Pakistan’s normal import duty on import
of chicken is only 25 per cent against India, which has slapped 100 per
cent import duty on chicken to protect its local industry. Chicken
processing is the need of the day but Pakistan is processing just 3-4
per cent poultry while 90 per cent of the poultry is sold as raw.
“At present several poultry processing units are under progress in
the country as the processing plants have been imported and construction
is underway and if relaxed import policy continues billions of rupees
investment in poultry processing industry will be shattered,” he warned.
Raza Khursand stated that Pakistan required at least Rs200 billion
investment to provide hygienic chicken to whole nation of 180 million.
However, the easy import of processed chicken will restrict the new
investment in this industry, he added.
He said that the Brazilian Poultry industry, which is very
competitive due to less cost, is also focusing Pakistan for its poultry
products export. Pakistan has approved the import of chicken meat from
Brazil - currently the largest exporter of halal chicken in the world.
The government will have to impose 100 per cent duty on import of
chicken products from any country in line with the Indian government, as
it does not violate WTO rules, he pointed out.
K&N CEO and Pakistan Poultry Association Senior Vice Chairman
Khalil Sattar suggested that Pakistan should enter into Free Trade
Agreements and Preferential Trade Agreements with only those countries
where it has a clear and mutual competitive advantage.
That local cost of production is already high on account of
electricity and gas outages and prevalence of epidemic diseases on
account of lack of regulations, coupled with import duties on inputs,
making the local production uncompetitive.
Pakistan, being predominantly a Muslim country, stands to benefit
from growing demand of Halal food world over. Even restaurants like
McDonalds, Subway, KFC, etc. are offering Halal products in Europe, USA,
Canada, Thailand and other parts of the world.
“Worldwide, there are subsidies on export of processed chicken. Some
provide subsidies on freight, some have lower preferential rate of
electricity for agriculture, poultry and livestock and some purely as an
incentive for foreign exchange earnings.
"There is a need to bring down the cost of production of the poultry
processing plants by increasing their capacity utilization particularly
in the face of power and gas outages. Bilateral Trade Agreements such as
FTAs and MFNs with countries which have different regulations and
protocols, defeat the principle of bilateral trade, as such, our
capacity utilization decreases, increasing our cost of production.”
He said that until the FTAs are signed, no imports of processed value
added chicken products were taking place. Khalil Sattar, who recently
celebrated his 50th anniversary in the poultry industry, proposed that
until international community’s regulations requirements are fulfilled,
no further FTAs be signed which include processed chicken meat and its
value added products.
Pakistan is the only country in the world that has an absolute open
door policy. No questions asked, one can import from anywhere in the
world, he said. The industry experts asked the government that all
impediments which increase the cost such as lower capacity utilization,
import duties on inputs, lack of protection against imports and lack of
regulations for disease identification need to be addressed for making
exports feasible. Consequently, the government should restore Zero
Rating to reduce cost of production, besides withdrawal of Import Duties
on Inputs under specific requirements of poultry processing industry. |
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