Pakistan's Per Capita Milk Consumption Reaches 231 Liters

[Riaz Haq]

Per capita milk consumption in Pakistan reached 231 liters (231 Kg) in 2019, according to a new research report entitled ‘Asia – Whole Fresh Milk – Market Analysis, Forecast, Size, Trends and Insights’. It has almost doubled from 119 liters per person in 2011. Milk production in Pakistan is the second highest in Asia and the third highest in the world.  Per capita milk consumption of 231 kg in Pakistan is the third highest in Asia, behind Uzbekistan's 339 Kg and Turkey's 281 Kg, according to the IndexBox report. 

Top Milk Producing Countries. Source: FAO

Milk Production:

Pakistan produced 47 million tons of milk in 2019, the third largest in the world after top-ranked India's 198 million tons and the United States' 100 million tons. Pakistan’s milk production is projected to increase by an average of 3% a year due to an increase in the herd population. According to FAO projections, Asian production is expected to increase by 2% in 2020 due to expected growth in India, Pakistan, and China, while Turkey may experience a decline.

In value terms, India ($146.8B) led the market, alone. The second position in the ranking was occupied by Pakistan ($37.3B). It was followed by China.

Milk Production Growth in Pakistan

Milk Consumption: 

Milk consumption in Pakistan in 2019 was 231 Kg per capita. It has grown an average of 3.2% a year in the last decade. From 2009 to 2019, the average annual rate of growth in terms of volume in India totaled +5.4%. The remaining consuming countries recorded the following average annual rates of consumption growth: Pakistan (+3.2% per year) and China (-1.2% per year).  

Pakistan Dairy Sector:

Vast majority of milk producers in Pakistan are small farmers who own a few cows or buffaloes and sell unprocessed milk. However, commercial scale dairy farming is starting to grow in the country.  Since the year 2000, corporate sector has seen the potential and jumped in with brand names like Dawood's Engro and Nestle's MilkPak.  This has led to the enlargement of herds with imports of high-quality milk germ plasm, the productivity per animal, milk collection, processing and marketing, the supply of dairy inputs (machinery, equipment, feeds, semen, and elite dairy animals), and farmers knowledge, and skills on modern management practices.   

The size of the opportunity for selling dairy products in Pakistan has attracted significant investments from European giants like Nestle, FrieslandCampina and Unilever. Commercial dairy farms like JK Dairy.  

Pakistan Agriculture Output: 

As of 2016, Pakistan's agriculture output is $52.5 billion, the 10th largest in the world in terms of gross value of agricultural production at current prices, according to Food and Agriculture Organization (FAO). China leads with $1.2 trillion in agricultural output, followed by India's $365 billion, United States with $329 billion, Brazil's $167 billion, Indonesia $135 billion, Japan's $91 billion, Russia's $69 billion, Turkey's $69 billion, France's $65 billion and Pakistan's $52 billion. 

Top 10 Countries by Agriculture Output. Source: FAO

Summary:

Pakistan is among the world's largest dairy producing and consuming nations. Pakistan produced 47 million tons of milk in 2019, the third largest in the world after top-ranked India's 198 million tons and the United States' 100 million tons. Per capita milk consumption in Pakistan reached 231 Kg in 2019. Pakistan’s milk production is projected to increase by an average of 3% a year due to an increase in the herd population. Vast majority of milk producers in Pakistan are small farmers who own a few cows or buffaloes and sell unprocessed milk. However, commercial scale dairy farming is starting to grow in the country. Overall, Pakistan's agriculture output is the 10th largest in the world.

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[Riaz Haq]

Pakistan Economic Survey: Health & Nutrition 2021-22

https://www.finance.gov.pk/survey/chapter_22/PES11-HEALTH.pdf

Infant Mortality Rate (IMR) in Pakistan has declined to 54.2 deaths per 1,000 live births
in 2020 from 55.7 in 2019, while Neonatal Mortality Rate declined to 40.4 deaths per
1,000 live births in 2020 from 41.2 in 2019. Percentage of birth attended by skilled
health personnel increased to 69.3 percent in 2020 from 68 percent in 2019 (DHS & UNICEF). Maternal Mortality Ratio fell to 186 maternal deaths per 100,000 births in
2020, from 189 in 2019 (Table 11.1).
With a population growing at 2 percent per annum, Pakistan’s contraceptive prevalence
rate in 2020 decreased to 33 percent from 34 percent in 2019 (Trading Economics).
Pakistan’s tuberculosis incidence is 259 per 100,000 population and HIV prevalence rate
is 0.12 per 1,000 population in 2020.


Table 11.1: Health Indicators of Pakistan
2019 2020
Maternal Mortality Ratio (Per 100,000 Births)* 189 186
Neonatal Mortality Rate (Per 1,000 Live Births) 41.2 40.4
Mortality Rate, Infant (Per 1,000 Live Births) 55.7 54.2
Under-5 Mortality Rate (Per 1,000) 67.3 65.2
Incidence of Tuberculosis (Per 100,000 People) 263 259
Incidence of HIV (Per 1,000 Uninfected Population) 0.12 0.12
Life Expectancy at Birth, (Years) 67.3 67.4
Births Attended By Skilled Health Staff (% of Total)** 68.0 (2015) 69.3 (2018)
Contraceptive Prevalence, Any Methods (% of Women Ages 15-49) 34.0 33
Source: WDI, UNICEF, Trading Economics & Our World in data
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Food and nutrition

Calories/day 2019-20 2457 2020-21 2786 2021-22 2735

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Table 11.9: Availability of Major Food Items per annum (Kg per capita)
Food Items 2019-20 2020-21 2021-22 (P)**
Cereals 139.9 170.8 164.7
Pulses 7.8 7.6 7.3
Sugar 23.3 28.5 28.3
Milk (Liter) 168.7 171.8 168.8
Meat (Beef, Mutton, Chicken) 22.0 22.9 22.5
Fish 2.9 2.9 2.9
Eggs (Dozen) 7.9 8.2 8.1
Edible Oil/ Ghee 14.8 15.1 14.5
Fruits & Vegetables 53.6 52.4 68.3
Calories/day 2457 2786 2735
Source: M/o PD&SI (Nutrition Section)

[Riaz Haq]

Japanese dairy giant looks to enhance stake in Pakistan's NutriCo Morinaga for $56.6mn

https://www.brecorder.com/news/40185838

Japanese dairy giant Morinaga Milk Industry has sent a conditional offer to ICI Pakistan to acquire an aggregate of approximately 33.3% of the issued and paid-up share capital of NutriCo Morinaga (Private) Limited (NMPL), a subsidiary of ICI Pakistan, from NMPL's existing shareholders including that of ICI Pakistan.

The acquisition is set at an aggregate price of $56.6 million which translates to approximately $2.07/- per share, said ICI Pakistan in its notice sent to the Pakistan Stock Exchange (PSX) on Thursday.

NMPL was a joint venture between ICI Pakistan, Morinaga Milk and Unibrands (Private) Limited to locally manufacture and distribute nutritional formula products, and was recently merged with NutriCo Pakistan (Private) Limited, which was involved in the import and distribution of select products of Morinaga Milk.

The notice read that the Board of Directors of ICI Pakistan has granted an in-principle approval to ICI Pakistan to move forward with the proposed sale/ divestment of 26.5% of its shareholding in NMPL (i.e. partial divestment) to Morinaga Milk, subject to, inter alia, valuation of NMPL and the finalization of definitive agreements, to be presented to the Board of Directors for formal/final approval, if deemed fit by the Board.

ICI Pakistan has also been authorized to enter into a memorandum of understanding for the proposed transaction.

“The offer from Morinaga Milk is a testament to Morinaga Milk's confidence in the Pakistan market and the potential of NMPL to grow and cater to the growing nutritional needs of the children of Pakistan,” read the notice.

“As the owners of the ‘Morinaga' brand, know-how to manufacture the products along with its superior research & development facilities, Morinaga Milk is well-equipped to accelerate the growth of NMPL with the support of ICI Pakistan as a continuing joint venture partner (which shall continue to hold approximately 24.5% of the share capital of NMPL upon the completion of the proposed transaction),” it said.

Moreover, Moringa Milk Industry in its filing to the Tokyo Stock Exchange on Thursday said that the company has been exporting infant and toddler milk to Pakistan since 1978 and sees the South Asian country as an attractive market, boasting the fifth-largest population in the world, with continuing population growth forecast.

“Moreover, the Morinaga Milk Industry brand has gained broad recognition in Pakistan over many years through the export business, giving the Company a high chance of achieving further rapid growth in the Pakistan market.

“By acquiring management control over NutriCo Morinaga ... the company considers that it will be able to capture growth opportunities, leading to the further development of the Morinaga Milk Industry brand infant and toddler milk business in Pakistan and contributing to the growth and health of the consumers of the Company products,” it said.

Back in 2020, NutriCo Morinaga (Private) Limited commenced commercial operations of growing-up formula products at its manufacturing facility in Sheikhupura, Punjab.

At a cost of Rs5.5 billion, the manufacturing facility was the first asset investment by a global Japanese dairy and food company in Pakistan.

[Riaz Haq]

"Milk has the potential to be a $30 billion industry if it is organised"

https://aurora.dawn.com/news/1144640

Published in Nov-Dec 2022 Zeenat Chaudhary
Interview with Awais Bin Nasim, Managing Director, Tetra Pak Pakistan

ZEENAT CHAUDHARY: When was Tetra Pak established in Pakistan?
AWAIS BIN NASIM: Tetra Pak, headquartered in Sweden, is one of three companies owned by the Tetra Laval Group. About 40 years ago, Syed Babar Ali brought it to Pakistan as a joint venture with Packages Limited. Today, our customers include most of the major local dairy and juice producers like FrieslandCampina, Haleeb Foods, Nestlé, Shakarganj and Shezan International.

ZC: What material is used to make Tetra Pak’s packaging?
ABN: The main material (70% of it) used in Tetra Pak packaging is paperboard (which is made from wood pulp and provides stability and smoothness to the printing surface), aluminium foil (protects against oxygen and light to maintain the nutritional value and flavours of the contents in ambient temperatures) and polyethene (protects against moisture and enables the paperboard to stick to the aluminium foil). All of the raw material is imported from suppliers in Sweden and Brazil that are Forest Stewardship Council certified (a non-profit that promotes responsible management of the world’s forests).

ZC: Are Tetra Pak’s carton components recyclable?
ABN: We are able to recycle 100% of our carton components, including aluminium and plastic. Seventy percent of the packaging is made from long, strong recyclable fibres. In Pakistan, we work with Green Earth Recycling to recycle 42% of our annual production (27,000 tons of cartons) into furniture, waste bins, playground swings and other items. We are even turning the cartons into corrugated roofing for use in parking lots, animal sheds and stadiums, as they also lower the temperature by two to three degrees. Globally, we operate school feeding programmes and try to provide underprivileged children with free milk every day. This activity does not exist in Pakistan, but we are working with the government to find a mechanism to do so.

ZC: What makes Tetra Pak’s packaging, for milk in particular, stand out?
ABN: Tetra Pak packaging consists of six layers. The idea is to be able to package milk so that it can be made available for longer and to a larger number of people while remaining fresh, nutritious and free from adulteration and without using chemicals or preservatives. We provide our clients with Ultra High Temperature (UHT) treatment equipment, which they use at their plants to destroy the micro-organisms present in raw milk, while maintaining the milk’s nutritional integrity, making the end product suitable for distribution and consumption.

ZC: Are milk and juices packaged at Tetra Pak plants?
ABN: All products are packed at our customers’ plants. After manufacturing, we send them the packaging and we supply milk producers with UHT equipment.

ZC: What does UHT treatment entail?
ABN: When raw milk is produced, it needs to be preserved by killing most of the bacteria – this is done by flash boiling it at approximately 139 degrees centigrade for two to three seconds. The remaining bacteria become inactive/ dormant because the packaging prevents light and air from affecting the product, resulting in a shelf life of between six and eight months. Once a carton is opened, allowing light and air to enter, the bacteria become active, hence the need for refrigeration. UHT-treated milk requires a cold chain management process (once the milk is produced, it must immediately be stored at four degrees centigrade, otherwise the bacteria start multiplying). We are the only player in Pakistan to have a cold chain process.

[Riaz Haq]

"Milk has the potential to be a $30 billion industry if it is organised"

https://aurora.dawn.com/news/1144640


ZC: Doesn’t that result in a lot of milk being wasted nationwide?
ABN: Yes. Pakistan is among the top four largest milk producers in the world, but over 26% of this milk is wasted, due to storage issues, even before it reaches commercial entities. We also have the lowest milk yields in the world – we produce about seven to eight litres of milk per day per animal, whereas the world average is about 39 litres per day. We are far behind the optimum milk production level required.

ZC: What are the reasons for the high wastage and low yield?
ABN: There are a lot of contributing factors to wastage. For one, inefficient farming practices and poor farming infrastructure. Small-scale farmers especially are unaware that milk does not have a shelf life unless chilled immediately. Some dairy companies have set up milk collection centres where farmers can bring their milk for basic processing, chilling and transportation, but they need a method to preserve the milk during the travel time from the farm to the collection centre. Sometimes farmers add ice to the milk, causing adulteration. A major change is required in terms of infrastructure to preserve the quality of the milk supplied by farmers. There is also the need for government regulatory frameworks and policies. For example, India has a minimum pasteurisation law (milk must be heated at a certain temperature before it is sold for consumption) and this has resulted in the country’s milk producers converting to septic cardboard packaging, due to its shelf life and durability. Pakistan is probably the only country among the top 10 or 15 milk producers in the world which does not have a minimum pasteurisation law. The Punjab Government passed a minimum pasteurisation law in 2018, whereby loose milk would no longer be available by 2023, but nothing has been done so far. The low milk yield is due to an inbred gene pool of livestock, which results in lower production of milk (along with higher mortality rates and hereditary abnormalities). Moreover, the quality of the feed/ fodder is either low-quality or too costly. A lot of the time, farmers resort to letting their livestock free graze, resulting in them consuming toxins and other harmful substances.

ZC: Have the recent floods aggravated the situation?
ABN: Almost 33% of the population has been impacted and about 800,000 animals have been lost, which will have a significant impact. Loose milk prices have increased from Rs 120 and 130 per kilo to Rs 180 and 190 in Karachi. We are slightly lucky that the areas affected were not major dairy areas for encashment. It would have been more catastrophic if central or north Punjab were hit. The overall recovery will be difficult, but we can take this as an opportunity to start from scratch and improve the dairy/ livestock sector. This can be done by importing animals of certain breeds, investing in artificial insemination and teaching good farming practices.

ZC: What is the solution in terms of best farming practices?
ABN: Ten years ago, Tetra Pak conducted a CSR activity called ‘Dairy Hub’, where we introduced best farming practices to dairy farmers and trained them on the basic hygiene an animal requires, how to keep them hydrated, and how to clean their spaces. With these simple changes, we were able to improve their milk yields by 20 to 25%. However, a company can only give a certain level of support. It is a question of awareness at a national level. Similar to how awareness and information about wearing masks and getting vaccinated was disseminated during Covid-19, that is the scale of the intervention that is required. The milk industry has the potential to be a $30 billion industry if it is organised.

[Riaz Haq]

Annual milk production during 2021/2022 was estimated approximately 65.7 million tonnes, giving Pakistan a place in the list of world's top 5 milk producing countries. Dairy farming in Pakistan is fragmented and practiced on various scales both in rural and peri-urban areas mainly by private sector.

https://sdgs.un.org/sites/default/files/2023-05/B65%20-%20Tariq%20-...

Dairy sector in Pakistan plays a pivotal role in the national economy and its value is more than the
combined value of major cash-crops i.e. wheat and cotton. Annual milk production during 2021/2022 was
estimated approximately 65.7 million tonnes, giving Pakistan a place in the list of world’s top 5 milk
producing countries. Dairy farming in Pakistan is fragmented and practiced on various scales both in rural
and peri-urban areas mainly by private sector. However, this industry is facing challenges (nutrition,
healthcare, breeding, government support and public health) that threaten its sustainability and
livelihoods of millions of people involved in the sector