USDA forecasts boost for Pakistani meat exports to China post FY25

The United States Department of Agriculture (USDA) predicts that prices and import demand for meat in China will recover post FY25, presents a significant opportunity for Pakistani meat processing companies, especially with the China-Pakistan Economic Corridor (CPEC) making transportation and logistics easier.

Penetrating the Chinese market can improve overall margins since China offers better prices compared to the Middle East, Sherman Securities noted in a report.

China is the world’s largest importer of meat and edible offal, with imports totaling $24 billion in FY24. Frozen beef makes up 57% of these imports and commands a 32% premium over the average meat import price, costing $4.76/kg compared to China’s overall average import price of $3.62/kg.

However, Chinese imports of meat and edible offal fell from $31 billion in FY23 to $24 billion in FY24, a 22% year-on-year decline, due to high domestic production and an economic slowdown leading consumers to opt for cheaper alternatives.

Despite its potential, the Chinese market remains largely untapped by Pakistan. Currently, Brazil dominates the Chinese meat import market with a 34% share, followed by the USA (12%), Argentina (10%), Australia (9.8%), and other suppliers. Pakistan’s market share is minimal, highlighting a substantial growth opportunity.

The Organic Meat Company

The Organic Meat Company Limited (TOMCL), established in 2010, is a leading Pakistani processor and exporter of high-quality red meat and by-products.

TOMCL specializes in beef, offering it in various formats such as fresh-chilled, frozen, vacuum-packed, and heat-treated, along with mutton, camel meat, and both white and red offal. The company exports to countries across the Middle East, and is expanding access to markets like China, Russia, and Hong Kong.

Looking ahead, TOMCL expects local sales to continue growing as prices for local products are now comparable to average export prices to the UAE and Saudi Arabia.

Avoiding freight and other export-related costs will reduce expenses and boost profitability. China is expected to lead growth in FY25, with the company exporting PKR 100 million per month worth of cooked beef meat, a trend expected to continue throughout the year.

On September 24, 2024, TOMCL announced an agreement worth $12 million in China, valued at PKR 3.3 billion, which will positively impact revenue in FY25.