The overall situation of Food during the year 1998-99 was satisfactory. In order to provide relief to the consumers, the government has taken various measures to control the inflation in food items. The agriculture sector, which is the largest sector of Pakistan’s Economy, has registered a marginal growth of 0.35 per cent as compared to 3.82 per cent during the year 1997-98. The decline in the agricultural growth is mainly due to decline in cotton production, which suffered heavy losses due to virus attack. Similarly the production of wheat is also decline due to long spell of dry season at the time of sowing.
The overall situation of Food during the year 1998-99 was satisfactory. In order to provide relief to the consumers, the government has taken various measures to control the inflation in food items. The agriculture sector, which is the largest sector of Pakistan’s Economy, has registered a marginal growth of 0.35 per cent as compared to 3.82 per cent during the year 1997-98. The decline in the agricultural growth is mainly due to decline in cotton production, which suffered heavy losses due to virus attack. Similarly the production of wheat is also decline due to long spell of dry season at the time of sowing. The growth of major crops were 0.6 per cent in 1998-99 as compare to 8.3 per cent during the same period last year. The minor crops registered a growth of 0.6 per cent as it was 3.3 per cent in 1997-98. The Livestock Sector grewed by 1.5 per cent over the negative growth of 0.7 per cent in 1997-98, Fisheries sector increased by 3.7 per cent over 7.8 per cent in the year 1997-98. The production of sugar cane during the year is estimated at 55190.7 thousand tonnes which shows an increase of 3.9 per cent over the last year.
The average food availability remained satisfactory during the year 1998-99. The per capita availability of Rice, Pulses, Milk, Meat, Fruit and Vegetables increased by 1.86 per cent, 12.5 per cent, 1.99 per cent, 3.0 per cent and 0.33 per cent respectively as changeover to 1997-98 to 1998-99. The per capita availability of wheat increased by 1.58 per cent as compare to last year.
Rice is very important food as well as the cash crop, which is grown on 10.5 per cent of the total cropped area of the country, and it is main export item of Pakistan. During the year 1998-99 Pakistan exported 1.293 million tons of rice and earned $383.2 million foreign exchange as compared to the export of 1.659 million tons during the year 1997-98. The area cultivated under the rice crop during the current year is estimated at 2423.6 thousand hectares while it is indicating 4.6 per cent growth to last year. The production of rice is estimated at 4673.8 thousand tons as compared to 4333 thousand tons of last year, showing an increase of 7.9 per cent.
The Wheat is the main staple food of the population and the largest grain crop of Pakistan. The total cultivated area during the year 1998-99 is estimated at 20,983 acres, as this area was 20,667 acres during the same period last year. The production of wheat during the year 1998-99 was 18054.5 thousand tons as compared to 18694 thousand tonnes in 1997-98 showing a decline of 3.4 per cent. From July-March 1998-99. 2.163 million tons of wheat was imported to supplement domestic production as compared to 4.10 million tons during the same period of last year. According to the officials of Ministry of Food, Agriculture and Livestock, the target for the import of wheat has been reduced to 1.6 million tonnes, as it was projected 2 million tonnes earlier by the EEC.
The sugarcane crop occupies 5 per cent of the total occupied area. The production and area under sugarcane crop have dropped by 18-20 per cent during the 99-2000 season. The total production of sugarcane during the year 1999-2000 year has been estimated at 43.18 million tons against 55.19 million tonnes in 1998-99 season. The area under sugarcane dropped by 12.1 per cent during the year 1999-2000 as 1.015 hectares were bought under sugarcane cultivation in 98-99 against 11.5 hectares in 99-2000.
The annual growth in consumption of Edible oil is 9 per cent. The country requirement for edible oil for the current year is estimated at 1.7 million tonnes as compared to 1.69 million tonnes of the last year. The 32 per cent will complete the requirement with in the country and 68 per cent will be imported as compared 30 per cent locally manufactured in the country and 70 per cent were imported during the year 1997-98. The total cost for the import of edible oil will amount to US$653 million as compared to last year’s US$712 million is showing a decrease of 7.2 per cent. The support prices of Sunflower, Canola, Soybean and safflower has increased 11.1 per cent, 11.1 per cent, 18.8 per cent and 16.7 per cent respectively.
The Gram, (Lentil) Masoor, Moong and Mash are major pulse grown in Pakistan. These crops are grown in the rained area on marginal lands. The total area for these pulses to grown was 1400.2 thousand hectares as compared to 1411.5 thousand hectares during the year 1997-98. The total production all four pulses was 855.5 thousand tonnes as it was 918.9 thousand tonnes during the year 1997-98.
The 70 per cent of potatoes crop is produced in autumn, while 15 per cent each in spring and summer. The area under Potato crop in 1997-98 was 104.6 thousand hectares yielding production of 1425.5 thousand tonnes. The production is expected to rise to 1611.4 thousand tonnes in 1998-99 showing an increase of 13.0%. The domestic requirement of potatoes is 1300 thousand tonnes.
The domestic requirement for onions 1998-99 is 1075 thousand tonnes and the area under onion crop in 1997-98 was 81.4 thousand hectares having production of 1076.5 thousand tonnes. The crop size for 1998-99 is expected at 1121.2 thousand tonnes, showing an increase of 4.15 per cent.
The rains heavily damaged the crop and production is estimated to decline to 135 thousand tonnes in 1998-99, while the chilies production during the year 1997-98 was 140.2 thousand tonnes against an area of 90.4 thousand hectares.
Livestock is regarded as an important part of food items and the main source of livelihood for the nation, who lived both in the urban and rural areas. The contribution of livestock towards GDP is 9 per cent while its share in agriculture sector is 37 per cent. The total foreign exchange earning of this vital sector was Rs.35 billion during the year 1998-99, while it was Rs.33.93 billion in the year 1997-98 which shows the 10 per cent of the overall export earning of Pakistan. The livestock Population includes Cattle’s, Buffalo’s, Sheep’s, Goat, Camel, Horses, Asses and mules. The livestock production has increased significantly.
The production from livestock sector includes Milk, Beef, Mutton, Poultry Meat, Wool, Hair, Bones, Fats, Blood, Eggs, Hides and Skin.
Poultry is an important sub-sector of livestock. The every family in rural areas and every fifth family in urban areas are associated with poultry production. Despite government efforts to give incentives to the poultry sector, the best of this sector has yet to come so far as it is not progressing rapidly.
The government is establishing a Cattle Feed Mills at total cost of Rs.18.5 million to start the Productivity Enhancement Programmes (PEP). The GOP will provide funds for the machinery and training to farmers on feed formulation programs. The government has also set up National Dairy and Livestock Development Board with Rs.100 million to accelerate and promote the livestock activities in the country. Pakistan has earned Rs.7-8 million though the livestock export. The import duty on micro feed ingredients has been reduced to 10 per cent.
Fisheries production during the year 1998-99 both marine as well as inland has been estimated at 616,500 Mt as compared to 590,000 Mt during last year showing an increase of 4.5 per cent. The share of marine sector was 431,5 Mt and inland contribution remained 167,530 million tonnes. The number of person employed in fisheries sector during the year 1998-99 is estimated to be 404,500 of which 113,850 person were in marine sector and remaining 290,650 were involved in inland fisheries against 404,210 person in fisheries of which 113,750 were engaged in marine and 290,460 were in inland fisheries sector.
Pakistan is losing millions of dollars in seafood exports every year. Seafood exports last year fetched only $120 million. Pakistan is catching 20,000 tonnes of Tuna Fish which fetches only 12.6 million, where if canned, with prime quality tin plate. It could be worth $140 million. According to the Chaimin of Pakistan Seafood Industries, Mr. Tariq Ikram that Sardine fish with 70,000 tonnes of every year and could bring $560 million as compared to the present $8.4 million only. Mackerel fish with a yearly catch of 20,000 tonnes could fetch $120 million against just $40 million annually.
There are 76 sugar mills are working in the country of which 39 are in Punjab, 31 in Sindh and 6 in NWFP having an installed capacity of 345,300 tonnes of crushing per day (TCD) and 9850 tonnes of sugar beat (all in NWFP). Pakistan may not export sugar during the year 1999-2000 due to decline in sugarcane crop production as Ministry of Food, Agriculture and Livestock spokesman said that sugar production at 2.9 million, while crop production would not exceed 43.5 billion tonnes. The main reason was dry weather.
Pakistan is the biggest export of molasses in the world and now facing a deficit of 25 per cent in the export of molasses. According to PSMA that the export of molasses will hardly touched the figure of 1.5 million tonnes or it may be lower.
DAIRY AND DAIRY PRODUCTS
Pakistan is one of the largest producers of milk in world, its dairy animal production is greater than that of North America and Canada, However, it still imports a substantial quantity of dairy products, due to lack of processing facilities and technological expertise. The country’s total demand of dairy products is estimated to 3.5 million tonnes per day and the total market value of these products is estimated to about 7.0 billion. The demand for dairy product is currently growing at double digits rate and it is projected that the current growing rate will remain same for the next five years.
The domestic beverages industry started productions in the year 1962. Now there are more than 30 plants providing direct employment to over 30,000 peoples. The beverage industry in Pakistan covers the manufacturing of a wide range of soft drinks and fruit juices. There are 153 units during the year 1998-99 and produced 222,0171 millions bottles as compared to 160 units and production was 179,8177 million bottles during the year 1997-98.
All tea is imported in Pakistan and there is no sign that Pakistan will be self sufficient in producing tea in near future. This is the second largest food item to be imported after edible oil. The country overall expenditure is over Rs 1 billion in importing tea. Pakistan has imported 98,649 tonnes of tea worth Rs.9818 million during the year 1997-98 as compared to $222.9 million in the year 1998-99. The government has reduced the import duty on tea from 45 to 25%
The country total requirement of vegetable ghee is 1.4 million and currently 160 units are providing vegetable ghee and cooking oil with installed capacity of around 2.5 million tons and 1.6/1.7 million tons. The production of vegetable ghee and cooking oil has been increased to 615,000 thousand tonnes in July-March 1998-99 from 546 thousand tonnes during the 1997-98 showing an increase of 12.7 per cent. The production of cooking oil decline by 5.4 per cent by moving to 75,000 tonnes in July-March 1998-99 against production of 80,000 tonnes in the corresponding period of last year.
There are over 100 biscuits manufacturers in Pakistan and all of them are fighting for a larger slice in the 100,000 tons biscuits market. Most of the biscuit factories in the countries suffered heavy losses as the biscuits manufactured in the exempted regions flooded the markets throughout the country. The 50 per cent biscuit manufacturers have closed their factories in Punjab due to 18 per cent sales tax and 10 per cent other taxes as against incentives enjoyed by the biscuit manufacturers in Hattar.
PRODUCTION OF DATES
There are more than 300 varieties of dates produced in Pakistan. The annual production of dates in Pakistan is estimated 535,000 tonnes of which only 86,000 are exported and rest of them consume locally.
PRODUCTION OF FRUITS
Pakistan has produced 6,294,600 tons of fruit against an area of 640,000 hectares during the year 1998-99 as compared to 2,037,000 tonnes of fruits on an available area of 196 hectares The main export in fruit is Kinnoo and Mangoes while other fruit are also exported but in limited quantity. Pakistani Kinnoo is mainly exported to the United Kingdom, Netherlands, Singapore, Malaysia, Thailand, Indonesia and Bangladesh.
In UAE, Pakistani Kinoo is the second largest export with 17 per cent share, next to China. As per Export Promotion Bureau (EPB) the smallest exporters like Australia and Netherlands have increased their exports to this market Australia is getting $2100 per tonnes, Netherlands $4500 per tonnes, Pakistan $876 and China $950 per tonnes. Pakistan entered in the Kuwait market in 1996 and the market of Pakistani Kinnoo has increased from 1.86 per cent to 2.48 per cent since its induction in Kuwait.
EXPORT OF FOOD ITEMS
Exports of major Food items recorded a rise of 12.2 per cent due entirely to higher export of Sugar ( $166.1 million) and Vegetable ( $28.6 million) partly offset by lower export of Fish and Fish Preparations (-$48.9 million), Rice (-$28.8 million) and Fruits (-$8.8 millions).
IMPORTS OF FOOD ITEMS
The import of major food items drop of $ 302.0 million or 42.6 per cent in import value of wheat resulted under the combined impact of both the reduced quantum, reflecting mainly enlarged production, and lower average import prices. The negligible import of sugar was largely the reflection of bumper sugarcane crop, which resulted in 49.2 per cent rise in sugar production during 1997-98. On the other hand, the import of pulses and spices rose by 26.5 per cent and 192.4 per cent respectively on account of both the enlarged quantum and higher import prices. In the case of edible oil, 7.3 per cent rise in the value resulted due entirely to a sharp rise of 151.7 per cent in the quantum of imports of soybean oil, while in the case of Palm oil, it declined by 7.1 per cent.
THE FAST FOOD REVOLUTION IN PAKISTAN
Pakistan has shown great potentials for foreign investments. The last decade has witnessed more foreign investment in Pakistan than other four decades. The major investment done by the foreign countries in Energy and Franchise Food Sector. Karachi, the biggest city of Pakistan, has now become the home of major foreign and as well as local food Franchise.
Few years back, we heard the names of Kentucky Fried Chicken (KFC), McDonalds, Pizza Hut, Cupola, Taco Makers, Dunkin Donuts and Subway in the European and other Asian countries, but now, in Pakistan these name are running their business successfully as per their international standard. The question arises that why the scenario has change, either peoples are looking for change in food or change in atmosphere or the change is for both.
PIZZA HUT was the fist foreign franchise which was open in the city in 1994 with the collaboration of MCR (Pvt) Limited and Tricon International. Currently they have 9 outlets in the country and have planned to increase the outlets to 25 by the year 2002. During the last six successful year of operation in Pakistan, the company’s sales has grown upto 25 per cent per annum. The employee’s strength of the company is over 500 in all nine outlets and at all levels in Pakistan.
Kentucky Fried Chicken (KFC)
The Artal Group has open Kentucky Fried Chicken in 1997 and now they are leading the food franchise business in Pakistan in terms of number of outlets. The Artal Group is a subsidiary of Artal Restaurant International. The group has established a Poultry Plant and Mineral Water business besides KFC. According the officials, KFC had 180 out lets in India where population is over 96 million, while in Pakistan, the number of outlet is 15 against 140 million population.The KFC enjoys a distinct advantage over the other foreign fast food restaurant as chicken.
Artal Group in Pakistan has setup a Poultry Plant at Lahore to meet the requirement of KFC. The Plant is following a strict standard in terms of good quality and food. The Mineral water plant located in Karachi’s leading industrial zone, Korangi and they are also engaged in baking products for KFC and for the local market also. Their bread Harry’s is very much popular in the Europe and now successfully getting business in 40 million annually. Pakistan also alongwith other baking products.
McDonalds is the largest and very much popular fast food chain of restaurants in world and now they have open their outlets in Pakistan also with the collaborations of Sizza Foods (Pvt) Limited on 50/50 equity basis in 1998. They have currently more than 5 outlets in Pakistan, while they have 25,000 restaurants in 115 countries. McDonalds main Competitor is all major international and local quick service restaurants. The management is trying hard to set good standard as other internationally restaurants have for the peoples who wants good food on affordable prices.
THANKS GOD ITS FRIDAY (TGIF) AND PIZZA EXPRESS
TGIF, the franchise for the casual dining chain in Pakistan is held by Cupola Group, which also has the franchise for another international restaurants, The PIZZA EXPRESS. Both the outlets are housed in 40,000 square feet complex on Zamzama Boulevard in Defence Housing Authority, Karachi.
PIZZA EXPRESS serves the authentic Italian Pizza and updates its menu every month to ensure that the taste buds never get tired of the scrumptious pizzas and other appetizer.
SUBWAY in Pakistan has been launched by Pak Franchise Development Co. (Pvt) Limited who are the territorial agents. Subway has been the fastest growing fast food franchise over a decade and has over 13400 outlets in over 67 countries. The idea of building a tailor-made sandwich right in front of your eyes is new to Pakistan. According to management, the SUBWAY is using Pakistan meat and bread and to be involved in the process of improving their nutritional content.
Founded in 1950 in USA, Dunkin’ Donuts today has over 3,000 outlets in about 39 countries including North America. Dunkin’ Donuts has plans to open either combo donuts and ice-cream outlets for exclusive ice-cream outlets for the local investor also has the franchise for Basin Robbins 31 Ice cream, which is a sister concern of Dunkin’ Donuts. In Pakistan, the Dunkin Donuts has started their operation in Clifton, Karachi and they have planned to increase the outlets to 10 by the year 2001.
Black TeaProject: Pakistan import of tea costs Rs. 10 to 12 billion every year and government has taken first step towards self-sufficiency in tea by setting up a black tea processing plant with the initial capital of Rs. 20 million with Pakistan Agricultural Research Council (PARC) at Shakairi. The installation of this plant would act as a catalyst to induce local farmers towards tea cultivation. Out of Rs. 20 million, 15 million will be used for the processing plant and Rs. 5 million for the increase in the acreage of tea. As per official sources, the PARC has demanded Rs.31 million for launching a three year tea production project and set a target of 2,000 acres for tea cultivation during three years time but because of reluctance shown by local farmers it has been revised the target to 500 acres only. The farmers are now getting a return of Rs. 10,000-12,000 per acres from their land but if they cultivated tea they would get Rs. 40,000 to 50,000 per acres.
Date Processing Plant: Pakistan Industrial Development Corporation (PIDC) has shown their interest in establishing an export oriented date processing plant at Khairpur near Sukkur, Sindh, this was disclose by the PIDC officials in last Dates show-99, which was organized by the Export Promotion Bureau (EPB) at Khairpur.
Apple Treatment Plant: The first ever private plant of apple treatment will be completed in this year and will treat 20,000 tonnes of apple for consumption at home and export and will bring foreign exchange annually for the country. The treated apple will be exported to Europe, Middle East, Far East, Gulf, Singapore and Malaysia and Pakistan’s earn only $1 million by exporting untreated apple.
Seafood Processing Plant: Akhlaq Enterprise is establishing the largest seafood processing plant at Karachi Fish Harbor (KFH). The cost of the project would be $500m and plant would be constructed over an area of 1,250 square yards with latest blast freezer for instant freezing. The project will commissioned by the end of this year and will have the capacity of 350 tonnes to 375 tonnes of seafood and processing capacity will be from 30 tonnes of seafood per day including 20 tonnes fish and 10 tonnes shrimps.
Shazad Fruit Farm: The Renala Khurd based firm Shahzad Fruit Farm is establishing a largest fruit farm to produce fruit products and fruit juices. The farm will be spread over an are of 82 acres. Currently the SFF is supplying fresh fruits to Mitchell’s Fruit Farm as they have reduced to non-equity.
Expansion Programme: The Continental Biscuits, a joint venture of Danone Group of France has initiated expansion of its unit in Sukkur with the total investment of Rs. 900 million. The Danone and CBL have the 49.5 and 50.5 per cent equity participation and are investing Rs. 440m in the expansion program. The expansion will rise the production capacity of CBL from 14,000 to 21,000 tonnes by the end of this year. Danone Group is the world’s seventh largest food group and third largest in Europe while this group is the largest in France in biscuits and dairy items manufacturing. The machinery is being imported from Britain and the expansion will complete in the year 2001. The Danone group has asked CBL to raise the production capacity of 30,000 as it is the minimum capacity Danone has in the Europe.