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Focusing on halal food

Published on 5th Jan, Edition 1, 2015

 

Focusing on production of Halal Products does not pose any problem because of a huge domestic market of nearly 200 million people. The country is a member of the Organization of Islamic Cooperation (OIC) and Islamic Federation; it is the world’s fourth largest Rice producer; fifth largest Dairy producer; fourth largest Wheat producer and fifth largest supplier of Cattle. There are approximately 50 Halal certified companies exporting their produce to overseas buyers. This clearly shows that certification is an integral part of Pakistan’s trade portfolio. There are state-of-art Halal slaughter houses exporting to Middle East markets following international standards.

Halal certification provides the manufacturers a tool to market their products to Muslims living around the globe and distinguishes them from producers which don’t have such certifications. This in turn protects these businesses from undue factors, which may affect their sales, reputation and strength. This Certification is an added bonus for a product, mainly because a non-Muslim do not require such certifications but Muslims need Shariah certificate for the food they eat. The aim of the Halal certification is to improve export opportunities for local manufacturer’s as well as attract foreign investments in Pakistan. This also ensures that a product is hygienic and health focused catering to an ever increasing demand of Muslim consumers worldwide.

With the opening up of international food chains in Pakistan this aspect is becoming louder. Now most of these chains claim that they sell Halal products. However, certain segments are critical about who has issued the certificate. These chains are mostly owned by Pakistanis or they are joint venture partners, staff is also Muslim and it is also ensured that cooking oil and chicken used are supplied by a certified vendor.

The entry of these food chains has created new opportunities and it may be right to say that Halal industry is thriving. The Halal brand is not only relevant to food but also pharmaceuticals and fashion including make-up, leather bags and shoes. In countries like Malaysia, the government is pushing hard to make the country a global hub for Halal products.

Pakistan has a population of around 200 million, predominantly Muslim. Furthermore, the country has a more pure regime where consumption of alcohol is banned except for a tiny non-Muslim population and the use of pork and other non-Halal food items are virtually non-existent. Hence, Pakistan stands a better chance of emerging as a global hub for the Halal industry.

There is a definite need to create a link between the Halal industry and Islamic finance. It is true that Halal products cannot be deemed fully Halal if they are produced through a process that is not entirely Shariah-compliant. As it happens, many Halal manufacturers use interest-based borrowing or other Shariah-repugnant methods of finance, therefore their products cannot be considered 100% Halal. Although from a strict Shariah viewpoint, sale and consumption of such products is not considered impermissible, there is little doubt that such products are not produced through a Shariah-compliant process.

 

Pakistan, with a huge Muslim population, stands a chance of becoming a global centre of excellence for Halal business, if the government pays attention to this lucrative business sector. Halal in the Muslim world is like “organic” in the West, and Pakistan can claim to be a global Halal hub if the government spends some time and resources on delineating a Halal strategy for businesses in the country.

The Halal products are moving into mainstream international food business and their demand is steadily increasing. Pakistan, being a Muslim country, can assume a leadership role in global Halal food market provided proper strategies and operation mechanism are put in place. Demand for Halal foods is increasing, not only in Muslim countries but non Muslim countries as well due to their well recognized and accepted benefits. Halal consumers market or trade is growing fast in the world.

It is estimated that total Muslim population constitute nearly one-third of total population of the world. Of these, over 60% live in Asia, one fifth in the Middle East and North Africa. Some 400-600 million Muslims live in other regions. In Europe, there are an estimated 40 million Muslims. One million live in Canada whereas estimated 8 million Muslims live in United States.

Pakistan is blessed with considerable livestock resource potential, manpower and strategic location. Conceptually, being a Muslim country, Pakistan is considered in a more advantageous position to tap growing Halal market. Livestock products produced in the country have competitive price edge and predominantly almost organically grown. Hence Pakistan can serve as Halal Kitchen of the World. But incidentally Pakistan has no presence, as yet, in the Halal economy, which essentially caters to the faith needs of Muslim consumers worldwide. The local food manufacturers lack awareness about the magnitude of global Halal market.

Pakistani meat industry is severely handicapped compared to their Brazilian, Australian and even Indian competitors. Despite having the eighth largest herd of cattle and the third largest herd of goats in the world, Pakistan’s animal population is very scattered, which makes procurement of the animals for the abattoir an expensive campaign. But perhaps the single biggest challenge is regulatory: meat importing nations have strict health codes for the safety of the meat, including a requirement to be able to trace the meat of any diseased animal down to the exact location that it came from, so that the entire herd it was a part of can be slaughtered. This traceability is something that Pakistani herds lack, because the government has not yet invested in tracking and cataloguing the country’s animal population.

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