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Malaysia – Closer Farm Ties With Pakistan

News From : DagangHalal.com (19 Nov 2009)

Malaysia should not just look at enhancing bilateral ties with Pakistan, but also endeavour to forge trilateral cooperation with Middle East countries especially in the halal food industry as well as other products and services.

In making the call, Masood Khalid, Pakistan’s Foreign Ministry Additional Foreign Secretary for the Asia-Pacific, said there was vast potential for the three parties to work together in what was still relatively a largely untapped sector for cooperation among Islamic countries.

He said that Pakistan which has vast agricultural land and cheap manpower could supply the primary food products especially meat, mutton, milk, rice, vegetables and fruits while Malaysia and Middle East countries could set up downstream industries and undertake the marketing of the halal products, he told Malaysian journalists in the Pakistani capital recently.

Added to this was that Pakistan has a huge consumer market of 170 million people while the Middle East consumer market nearly doubles that of Pakistan.

This, coupled with the Gulf region reportedly importing US$200 billion worth of food products yearly, point to a huge potential that should be exploited to the fullest.

Masood said to achieve this, there was a need for a working group representing Malaysia, Pakistan and the Middle East countries to be set up to look to ways to tap into this potential which will provide a major boost to economic cooperation among Islamic countries in food production.

Such cooperation would not only go a long way towards balancing trade between Malaysia and Pakistan which heavily favours Kuala Lumpur as evident by Malaysia’s exports to Pakistan last year which totalled RM5.95 billion while imports amounted to RM363.3 million, but also help Pakistan in fully utilising its agricultural and livestock products.

Masood said Pakistan has been producing abundant primary food products such as fruits and milk, but unfortunately it has just gone to waste since the country lacked the capability and technical know how in preserving, processing, and marketing them.

Last year alone, about US$2 billion of fruits such as apricots, mangoes and cherries had gone to waste due to a lack of processing industries for such products in the country.

Pakistan was expected to have a bumper paddy crop, of 6.3 million tonnes during the current season 2009-10, while domestic requirement of rice was only 2.5 million tons, which would create a surplus of 3.8 million tonnes of rice for the export market.

If there was such trilateral cooperation, Malaysia and Middle East countries could take up the excess rice through their networking, marketing and exporting linkages.

Touching on two-way economic cooperation, he said that the working groups to promote bilateral trade, investment and business between Malaysia and Pakistan would likely be held early next year.

The working groups and also a Joint Ministerial Committee and Joint Business Council to promote bilateral trade, investment and business was formalized at a meeting between Pakistan’s Foreign Minister Makhdoom Shah Mahmood Qureshi and Malaysian’s International Trade and Industry Minister Datuk Mustapa Mohamed in Putrajaya recently.

Meanwhile Pakistan’s Punjab Livestock and Dairy Development Department Secretary Mohammad Jehanzeb Khan, in an interview in Lahore, concurred with Masood that Malaysia’s expertise in the livestock industry, such as technology in slaughtering, processing and marketing, together with the halal certification, was needed by Pakistan to tap the billion dollar meat market in the Middle East.

He said Malaysia which has acquired a world class mechanism for processing and packaging of halal beef and mutton should take the opportunity to joint venture with Pakistan in this field.

He said that currently, Pakistan’s livestock exports to the Middle East were worth US$70mil with the potential to hit an export value of US$500 million with the right expertise and technology.

“We need to work harder to meet international halal standards and compliance,” he said.

Jehanzeb Khan said Malaysian and Pakistani parties could work together towards this especially in meeting the demand for halal food products of oil-rich producing countries in the Middle East, which have strong purchasing power.

He said Pakistan could also use Malaysia as a launching pad in exporting its meat and milk products to the Asean region, he said.

Pakistan has 60 million cattle, 55 million goats and sheep and 30 million buffaloes.

Besides exporting meat and live animals to the Middle East, Pakistan also exports live animals to Central Asia.

Jehanzeb Khan said Malaysia could also collaborate with Pakistan in milk and milk based products since the country was one of the largest producers of milk in the world.

He said that with the genetic upgrading of its buffaloes and cows, especially its famous “Nili-Ravi” and “Kundi” breed of buffaloes, they are coveted for their milk with high butter-fat content.

He hoped that the upcoming visit by the Malaysian Veterinary Department to Lahore would help to spearhead cooperation between both countries in this field.

Meanwhile Pakistan Trade Development Authority (TDAP) Director-General Usman Hasan, in his briefing to the journalists in Karachi, said that among the challenges faced by Pakistan was its narrow market focus.

Elaborating, he said that that 54 percent of its US$18 billion worth of global exports for 2008-2009 were only going to two markets, that is, the United States (23 percent) and European Union (28 percent), while Asian nations took in 41 percent, Africa six percent and Oceania countries one percent.

With the narrow market focus, the export potential of products from Pakistan which have numerous competitive advantages have largely remain untapped, for instance, in agro-food industries and minerals.

“Even where our standing in worldwide production of primary produce is high, our standing in export of value added products from the same products is however low,” he said.

He said Pakistan’s vision was to broaden the base of its exports by products which have competitive advantages via value-added activities, product diversification as well as expanding the market base.

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