Pakistan's Dairy Industry: A Comprehensive Overview

Milk Production and Processing

Pakistan boasts a substantial dairy cattle population of 49.6 million, leading to an impressive annual milk production of approximately 42 million metric tons. Despite this large production volume, only 5% of the milk is processed formally, equating to about 2.1 million metric tons. This processed milk primarily serves urban populations through established distribution networks.

Cheese, Milk Powder, and Whey Production

In addition to liquid milk, Pakistan produces around 10,000 metric tons of cheese, 160,000 metric tons of milk powder, and 20,000 metric tons of whey each year. These products are vital for meeting the demand for longer shelf-life dairy items and diversifying the range of available dairy products.

Key Dairy Enterprises

Major players such as Engro Foods, Nestlé Pakistan, and Haleeb Foods are integral to ensuring a steady supply of dairy products across the nation. Prominent dairy farms, including JK Dairy Farms and Nishat Dairy (Pvt) Ltd., contribute significantly to the processing and retailing of milk.

Exports and Imports

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

Significant Dairy Market Events

Recent developments in the industry include a 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 saw a threefold increase, highlighting strengthened trade relations. Discussions with Federal Minister Ahsan Iqbal by the Pakistan Dairy Association centered on the 18% general sales tax on packaged milk. Additionally, the Competition Appellate Tribunal upheld an antitrust decision against major dairy farmer associations in Karachi for milk price collusion.

Global Impact

Pakistan significantly contributes to global milk production growth, with a 3% increase in 2024, aligning with Asia's overall production rise. The country's dairy production volumes are often overstated due to a substantial informal sector, posing measurement challenges. Pakistan's position as a major buyer of Iranian dairy products has boosted Iran's dairy exports.

Challenges

The industry faces challenges, including significant milk price hikes driven by rising production and transportation costs. In Hyderabad, milk production dropped to between 400,000 and 500,000 liters per day, down from about 700,000 liters, causing many smaller dairies to close. Pakistan and the United States have 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 in Balochistan to enhance public health and improve livestock and dairy development. The Punjab Food Authority's crackdown on food adulteration in Lahore led to the sealing of a restaurant and two dairy shops, with 84,000 liters of milk inspected and adulterated products disposed of.

Future Prospects

Pakistan's fodder industry aims to reach $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, prompting proposals for milk price increases due to escalating production costs.

Efforts to reform the dairy sector include reducing the GST on dairy products from 18% to 10%, aiming to provide significant tax relief and support to the dairy sector. Pakistan's government plans significant reforms to enhance productivity and formalize operations in the predominantly informal dairy sector.

Pakistan has approved the export of 40 food items, including dairy products, to Gulf countries, aiming to mitigate potential food supply disruptions due to regional conflicts. This initiative will utilize air and sea routes for efficient transport without impacting local food availability.

Modified: 2026/04/23