Australian sheep saga: Fallout starts spreading to food businesses

Animal exporters in Australia seem equally worried that the public relations disaster may turn into an industry-wide catastrophe.

On paper, indiscriminate culling of the allegedly infected Australian sheep is estimated to result in a comparatively bearable loss of Rs130 million; industry sources, however, believe otherwise. They say that conflicting reports in the media about the sheep’s medical fitness will jeopardise the future of Pakistan’s multi-million dollar meat export industry.

“My foreign clients are extremely concerned about all that is going on here with regard to the Australian sheep. It is sending wrong signals to the entire world that we do business without regulatory checks and balances,” one of the country’s largest meat exporters told The Express Tribune. He requested anonymity, saying he did not wish to offend the owners of PK Meat and Food, the company that had imported the sheep in early September. He put the size of the industry in the range of $300-350 million, dominated by about a dozen major players.

He criticised the government for complicating the issue by releasing contradicting test reports and culling the livestock in a questionable manner.

Pakistan exported meat and edible meat offal worth $167.2 million in 2011, with annual growth in export volumes of about 38% between 2007 and 2011.

Similarly, Pakistan exported raw hides, skins and leather worth $467.8 million in 2011. Pakistan was the world’s 17th largest exporter of raw hides, skins and leather that year.

According to an Iranian importer of Pakistani meat, who is currently on a visit to Karachi, the government’s clumsy handling of the sheep controversy could lead to a drastic decrease in the country’s meat-related exports in the coming years. “First, your government failed to check the animals properly; then it released conflicting test reports; then it ordered their immediate culling in a most inappropriate manner – followed by apparently false anthrax alarms,” he said.

While the Pakistani meat industry braces itself for tougher times ahead, animal exporters in Australia seem equally worried that the public relations disaster may turn into an industry-wide catastrophe.

“The markets have been falling by about 10 Australian dollars a week, for the last four weeks. So that’s driving the export market down, because they know what’s going on in the Middle East,” Australian ABC News Network’s website quoted an animal exporter as saying.

When contacted by The Express Tribune, an official of the Australian High Commission in Pakistan said her government is working with Australian exporters to reduce health risks to animals when they are traded overseas.

“The Australian government has not halted exports of live animals,” Melissa Kelly, first secretary at the Australian High Commission, said; in a rebuttal to news stories that appeared in several Pakistani newspapers on Friday.

Australia is the fifth largest exporter of live animals to the world, with total exports of $1.1 billion in 2011. About $9.2 million of Pakistan’s total imports of live animals in 2011 – out of a total of almost $16 million – were from Australia; which translates into a share of roughly 58%.

Similarly, Australia is the world’s largest exporter of wool, with almost $3 billion worth of exports in 2011. Almost 11% of Pakistan’s total imports of wool – amounting to $19.1 million – came from Australia that year.

Kelly said the High Commission is concerned about the effect the sheep controversy will have on bilateral trade with Pakistan. “We hope the incident won’t result in a negative perception of Pakistan as a trading partner and as a destination for investment. Nor do we want it to affect Australia’s strong reputation as a leading agricultural exporter,” she said.
Kazim Alam
Published in The Express Tribune, September 23rd, 2012.

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