Pakistan's Dairy Industry: A Comprehensive Overview

As the third-largest milk-producing nation worldwide, Pakistan's dairy industry is a cornerstone of its agrarian economy, significantly contributing to the national GDP and providing extensive employment opportunities.

Milk Production and Processing

With an estimated dairy cattle population of 49.6 million, Pakistan produces about 42 million metric tons of milk annually. However, only 5% of this production, roughly 2.1 million metric tons, is processed formally. This processed milk is primarily distributed to urban populations through well-established networks.

Cheese, Milk Powder, and Whey Production

Pakistan produces approximately 10,000 metric tons of cheese, 160,000 metric tons of milk powder, and 20,000 metric tons of whey annually. These products cater to the demand for longer shelf-life dairy items and diversification in dairy products.

Key Dairy Enterprises

Major enterprises such as Engro Foods, Nestlé Pakistan, and Haleeb Foods are essential in ensuring the availability of dairy products nationwide. Notable dairy farms like JK Dairy Farms and Nishat Dairy (Pvt) Ltd. significantly contribute to the supply of milk for processing and retailing purposes.

Exports and Imports

Pakistan exports about 40,000 metric tons of dairy products yearly, targeting neighboring regions and the Middle East. To satisfy domestic demand, the country imports approximately 50,000 metric tons of value-added dairy products, including cheese and flavored milk.

Significant Dairy Market Events

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

Global Impact

Pakistan contributes significantly to global milk production growth, with a 3% increase in 2024. This growth aligns with Asia's overall milk production increase. Similar to India, Pakistan's reported dairy production volumes are often overstated due to a substantial informal sector, presenting measurement challenges. Pakistan has been a major buyer of Iranian dairy products, boosting Iran's dairy exports.

Challenges

The industry faces challenges like significant milk price hikes, driven by rising production and transportation costs. In Hyderabad, milk production decreased to between 400,000 and 500,000 liters per day, down from about 700,000 liters, leading to the closure of many smaller dairies. Pakistan and the United States agreed to enhance agricultural collaboration focusing on hybrid and disease-resistant crops, local vaccine production, and livestock breed improvement. The relocation of dairy farms was approved by the Chief Minister of Balochistan, Mir Sarfraz Bugti, to enhance public health and improve the province's livestock and dairy development. The Punjab Food Authority's crackdown on food adulteration in Lahore resulted in the sealing of a restaurant and two dairy shops, with 84,000 liters of milk inspected, leading to fines and the disposal of adulterated products.

The Harichand cattle farm in Pakistan's Charsadda district is under official investigation due to significant administrative and operational discrepancies. Pakistan's fodder industry plans to hit $1 billion in exports within five years. The country exported 930,802 tons of animal feed worth $112.2 million in the fiscal year ending in June, with the United Arab Emirates accounting for $33.2 million of these exports. Rising costs are affecting dairy farmers in Karachi, leading them to propose a milk price increase due to escalating production costs, driven by increased expenses for electricity, medicines, gas, and livestock fodder.

Modified: 2026/03/13