Overview of Pakistan's Dairy Industry

Pakistan ranks as the third-largest milk-producing nation worldwide, making its dairy industry an essential part of the agrarian economy. This sector not only provides substantial employment opportunities but also contributes significantly to the national GDP.

Milk Production and Processing

With an estimated dairy cattle population of 49.6 million, Pakistan produces approximately 42 million metric tons of milk annually. However, only about 5% of this, roughly 2.1 million metric tons, is subjected to formal processing. The processed milk is primarily distributed to urban populations through structured networks.

Cheese, Milk Powder, and Whey Production

Packing a punch in the dairy product sector, Pakistan produces around 10,000 metric tons of cheese annually. The country also manufactures approximately 160,000 metric tons of milk powder and 20,000 metric tons of whey, catering to the demand for long-shelf-life and diversified dairy products.

Key Dairy Enterprises

Major companies like Engro Foods, Nestlé Pakistan, and Haleeb Foods play vital roles in ensuring nationwide availability of dairy products. Notable dairy farms such as JK Dairy Farms and Nishat Dairy (Pvt) Ltd. are crucial in supplying milk for processing and retailing.

Exports and Imports

Pakistan exports around 40,000 metric tons of dairy products annually to neighboring regions and the Middle East. Concurrently, the country imports approximately 50,000 metric tons of value-added dairy products, including cheese and flavored milk, to satisfy domestic demand.

Significant Dairy Market Events

Recent developments include collaboration with Italy to enhance dairy processing technologies, supported by Federal Minister for National Food Security and Research, Rana Tanveer Hussain. In 2024, imports from Belarus increased threefold, highlighting strengthened trade relations. Discussions with Federal Minister Ahsan Iqbal by the Pakistan Dairy Association regarding the 18% general sales tax on packaged milk have also been noteworthy. Additionally, the Competition Appellate Tribunal upheld an antitrust decision against major dairy farmer associations in Karachi concerning milk price collusion.

At the Dairy Olympics, Andrey Dvoychenkov, General Manager of NielsenIQ, emphasized the robust growth and international engagement of Pakistan's dairy industry. Despite complex relations with India, current geopolitical tensions have minimally impacted the dairy sector. Ongoing herd expansion and gradual productivity improvements are anticipated to drive future growth, positioning Pakistan as a key player in expanding milk production capacities across Asia.

Global Impact

Pakistan is a significant driver of global milk production growth, with volumes increasing by about 3% in 2024, contributing to the overall 3% growth in Asia's milk production. Notably, similar to India, Pakistan's reported dairy production volumes are largely overstated due to the informal sector's significant share, which is challenging to measure accurately.

Pakistan was a major buyer of Iranian dairy products and contributed to the increase in demand for Iran's dairy exports.

Challenges

Significant milk price hikes due to escalating production and transportation costs are a current challenge. In Hyderabad, Pakistan, milk production has fallen to between 400,000 and 500,000 litres per day, down from approximately 700,000 litres, due to rising costs, leading many smaller dairies to close.

Pakistan and the United States have agreed to enhance their agricultural collaboration. The collaboration focuses on joint research into hybrid and disease-resistant crops, local vaccine production, and livestock breed improvement. Pakistan's food security ministry confirmed the initiative aims to boost productivity and exports.

Modified: 2025/11/11