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Pakistan plans to beef up its share in global halal market

Pakistan plans to take full advantage of its geographical location close to the vibrant Muslim world, including the principal markets of UAE, Saudi Arabia and North Africa.

With establishment of Pakistan Halal Authority, or PHA, Islamabad is all set to enter into the multi-trillion dollar global halal market. Just-approved by the National Assembly, Pakistan Halal Authority, will certify all items for export, ranging from meat, to food, processed foods, cosmetics, cold drinks, pharmaceuticals and toiletries.
Pakistan plans to take full advantage of its geographical location close to the vibrant Muslim world, including the principal markets of UAE, Saudi Arabia and North Africa, where personal incomes are rising fast and nations are enjoying unprecedented prosperity.
But it will have to compete with already well-established and major sources of halal products. Say Muslim-Malaysia, and non-Muslim Brazil, the world's producer and exporter of halal products. International projections are that the global halal market will continue to rise on a fast track at a 6.9 per cent compound growth rate. It will grow into a $1.6 trillion market in three years to 2018. Pakistani share in halal exports, as of now, is around five per cent of the world trade, according to official estimates. The big, global growth comes on the back of the projection that the present Muslim population of 1.6 billion will rise to 2.6 billion by 2050.
Pakistan, so for, has been a small operator in the global halal products market. Take the processed meat. Pakistani exports of processed meat which were $40 million in fiscal year-2000 rose to $ 90 million in fiscal year-2005, but then picked up to $240 million in fiscal year-2015.
The export of Pakistani halal beef and mutton products has already been moving up, from 1.887 million tones in fiscal year-2014 to 1.951 million tonnes in fiscal year-2015. Mutton exports rose from 657,000 tonnes in fiscal year-2014 to 671,000 tonnes in fiscal year-2015.
Before  undertaking the full plunge, and afterwards, Pakistan  will have to seriously look into its own cost of production and the volume of various products, it figures out to export. Competition in the halal products market, already is, and will be more intensive, in the days to come.
PHA comes into being on the back of passage of the PHA law-2015. The law aim to: "promote import, export, trade and commerce with foreign countries." The PHA will work under the Pakistanis Ministry of Science and Technology.
The PHA law says, "there is a huge international business worth  trillions of dollars, bulk of which is being taken away by non-Muslim countries. The scope of the Halal sector covers a wide range of items such as food, pharmaceuticals, health foods, and supplements and toiletries. 
Pakistan being a Muslim country is taking only a nominal share of this huge export potential, due to non-existence of a legal and recognised entity or authority dealing with the halal sector." 
The law will help promote this business. The board of Governors of the PHA will include various stakeholders, from the federal and provincial governments, Shariah scholars and Pakistani chambers of commerce and industry. PHA will identify, and get implemented, standards  and specifications, for halal products.
The law It also provides a list of Halal and non-Halal animals which can be used. Jeddah-based Organisation of Islamic Countries-set guidelines on the halal subject, will be adopted. The Dubai Chambers of Commerce and Industry has also laid down guidelines on the subject.
The OIC Guidelines lay down the method of animal slaughtering, to ensure product uniformity the OIC region.  Among he Muslim countries, Indonesia at No. 1 and Turkey at No. 2 are, at present, among the biggest markets for halal products.
More countries and markets are joining this list. In contrast to this, non-Muslim countries and regions are the largest suppliers of halal products, so for. New  Zealand, a non-Muslim country, is at present the biggest supplier and exporter of halal meat products.
In order to raise production and exports of halal products, Pakistan announced in the National Budget in June this year, that meat processing plants which will be installed by December 2015, will enjoy a tax holiday - and will be exempt from payment of Income tax - for four years. This tax-free status of meat processing plants should go a big way to gear up halal exports. Add to that the potential and production of several more food and other halal products for export.
Many companies, mainly national, and some foreign companies, operating in Pakistan, are currently engaged in modernizing their dairy products and meat processing plants. Foreign interest is marked by the recent raising of capital from the Pakistani stock market by foreign-owned Al Shaheer Corporation, which is considered to be a leading processor and exporter of meat.
The retired military men's welfare organisation, the Fauji Foundation, will finance the Fauji-Meat Ltd. It plans to produced 100 tonnes of meat per day - including, 85 tonnes of beef and 15 tonnes of mutton - for the domestic and foreign markets.
Views expressed by the author are his own and do not reflect the newspaper's policy.