INP-WealthPk
Buffalo milk to add to Pakistan's forex as foreign capital shows interest
April 21, 2021
BEIJING, April 21 (INP): Buffalo milk could add to Pakistan's forex as Chinese entrepreneurs show interest for investment in this sector, it was reported by China Economic Net (CEN) quoting Chen Yiyi, President of China’s Royal Group. Chen Yiyi told China-Pakistan Agricultural and Industrial Cooperation Information Platform (CPAIC) after a week-long visit to Pakistan that the country is rich in buffalo breeds, buffalo research, and buffalo milk manufacturing. “To leverage its advantages and enhance Pakistan-China cooperation in this field, we hope to set up a dairy processing plant in Pakistan," Chen added. Gu Wenliang, Agriculture Commissioner of the Chinese Embassy in Pakistan told CEN that Pakistan is the fourth largest milk producer in the world, with buffalo milk accounting for 60%. There are about 41 million buffaloes in Pakistan and the milk yield is higher than that in China. According to an economic survey report of the Pakistani government, in the fiscal year of 2019-2020, the output of buffalo milk in Pakistan reached 256,000 tons. In 1974, Pakistan gifted 50 Nili-Lafite Buffaloes to China. Statistics provided by the Buffalo Research Institute show that the average milk yield of the first generation of Niza buffaloes, which was obtained by crossing the Buffalo of Pakistan with Chinese native female buffaloes, was 2083.8 kg, with the highest daily output of 13.4 kg. However, with the passage of time, milk production declines year by year. Strengthening cooperation with Pakistan in the future is one of the ways for Chinese enterprises to maintain or expand the production of high-quality buffalo milk. Whether Pakistan can export live buffalo is the focus of Chinese enterprises. "It is not allowed to export live animals in Pakistan so far," noted Dr. Khurshid Ahmad, Animal husbandry commissioner of Ministry of National Food Security and Research at a meeting held by CPAIC. In this condition, the Chinese enterprise has to make a detour to import Pakistan’s buffalo oocytes and frozen sperm. However, Pakistan is faced with several conundrums in the technological front. Pakistani insiders who received the Chinese delegation said due to limited domestic demand, the embryo breeding technology of Buffalo in Pakistan is falling behind and commercial export has not yet been realized.
Pakistan hopes to introduce Chinese buffalo embryo breeding technology and strengthen cooperation in buffalo breeding and export of high-quality frozen sperm and embryos. "If regulations permit, we are willing to share China's experience and embryo technology," Chen said.
China’s experiences and technologies in this respect will be beneficial to the re-development and upgrading of Pakistan's animal husbandry in terms of quality and quantity.
In addition to technological cooperation, "We are also willing to develop dairy products processing and industrial research in Pakistan to meet the demands of its domestic market and seek export to the Chinese and international markets.
will not only create foreign exchange reserve for Pakistan but also enhance the competitiveness of China and Pakistan in milk and meat production in Asia," Chen added.
Investment in processing plants is first and foremost to meet Pakistan's domestic demand. Although Pakistan is a major milk producer, it still spends 20 billion rupees every year to import milk and other dairy products. According to the economic survey report of the Pakistani government, 15% of Pakistani milk production was wasted due to improper transportation and lack of refrigeration equipment in the fiscal year 2019-2020.
Pakistan Dairy Association says that the export of dairy products and milk in Pakistan can actually reach USD 30 billion while the export value in the fiscal year 2020 is only USD 680 million.
To improve the processing capacity of dairy products and reduce foreign exchange losses, "the Pakistani governments at all levels have been dedicated to improving the investment environment in the past five years and that has facilitated investors." Chen said.
Xiao Ziqi, a member of the delegation who is experienced in agricultural investment, said that in Pakistan the purchase price of pure buffalo milk is RMB 4-5 per kilogram, which varies slightly from region to region.
In contrast, the purchase price of buffalo milk in China is about 2-3 times that of Pakistan. If Pakistan's buffalo milk can be exported to China, it will not only add to Pakistan's foreign exchange reserve but also provide a more favorable price for Chinese consumers.
The window has been open to Pakistan for export. Pakistan's dairy products and beef, which have been suffering from foot-and-mouth disease, may have two breakthroughs this year: in February, China’s Huiyu Group and Nestle Pakistan signed a memorandum of understanding to import Nestle cream from Pakistan. In April, a Pakistani company announced that it had been approved by China Customs to export 300 tons of beef after heat treatment to China. If it is done, it will become the first company in Pakistan to obtain such approval. Royal Group is not the first Chinese dairy enterprise to enter Pakistan. With the construction of the China-Pakistan Economic Corridor, dairy companies such as Liaoyuan Dairy, Yili, and Shengyuan have tried to lay out Pakistan one after another with some given up and some gained a firm foothold. Chen said that with the cooperation between the two governments further strengthened and the investment environment of Pakistan improved, "we think this is a more appropriate time to invest in Pakistan. In the next decade, buffalo milk will usher in more business opportunities. INP/JAVED