Pakistan bears $1.5m losses per month in meat exports to UAE

• The loss is caused due to non-inclusion of freight charges in export price of meat

Pakistan is reportedly incurring a monthly loss of $1.5 million due to the exclusion of actual freight charges in the export of meat to the United Arab Emirates (UAE). Customs Intelligence Karachi has addressed this issue by writing a letter to the Collectors of Customs at Jinnah International Airport (Karachi), Allama Iqbal International Airport (Lahore), and Benazir Bhutto International Airport (Islamabad) regarding the oversight in including the authentic freight charges in meat exports to the UAE.

The Minimum Export Price (MEP) established by the All Pakistan Meat Exporters & Processors Association comprises the value of meat along with freight charges. Remittances for meat exports to the country are received based on the Cost and Freight (C&F) value.

The Dubai government imposed a ban on the sea export of meat from Pakistan, effective from October 10, 2023. Consequently, there was a surge in demand for transporting meat from Pakistan to Dubai via air.

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The air freight, which stood at $766 per ton on October 7, 2023, for Emirates—the primary carrier of meat from Karachi to Dubai—escalated to $1187 per ton by December 2023, signifying a 55 percent increase.

Despite this significant rise in air freight costs, unscrupulous exporters failed to account for the change and continued exporting meat at the fixed rate of $3.9 per kg set in March 2023 when the freight costs were lower at $713 per ton.

It is noteworthy that the monthly export volume from Pakistan to Dubai is 3,575 tons of meat. The failure to incorporate the 55 percent increase in freight costs into the export value is causing the country to lose $1.5 million in foreign exchange every month.

The letter said, “In light of this, it is suggested to develop a mechanism that ensures the inclusion of the actual freight charges paid by exporters when declaring the C&F value of exported meat, thus preventing the deprivation of the country from significant foreign exchange earnings”.