Pakistani fishery export: eyeing the US$1 billion target

In the processing plant of a seafood company at the fish harbour of Karachi, workers are busying grading, cleaning, and packaging fresh shrimps. Twenty days later, they will make their appearance in some Chinese aquatic market.

From ribbon fish, croakers, cuttle fish, to shrimp, crabs, and lobsters, Chinese’ appetite for aquatic products has been growing with a considerable momentum since 2013. Out of Pakistan’s total fishery exports, 60 per cent are destined for China. 

“Fisheries is a big and emerging industry in Pakistan”, said Dr. Saeed Murtaza Hasan Andravi, Director Animal Sciences Institute NARC, Islamabad. It accounts for less than one percent of GDP, but provides vast employment opportunities for under-developed in Pakistan. Moreover, it can be a profitable profession and a promising means to earn foreign exchange.

Since the aquatic products enjoyed tariff concession under the second phase of China Pakistan Free trade Agreement (CPFTA) implemented in Dec 2019, Pakistan’s fishery sector witnessed a boom in terms of export. According to data released by the State Bank of Pakistan (SBP), Pakistan's exports of frozen seafood increased by 83.70% to $73.947m in the first seven months of 2019-2020 fiscal year. Statistics from Chinese customs show that in the first half this year, Pakistan’s fish meal exports to China topped 20,000 tons with a value of over USD 20 million.

But still, the aquatic industry can play a bigger role in Pakistan’s economy, especially amid the pandemic. “In our seafood industry, we have 450 million dollar export at the time, but we can increase it to 1 billion dollar”, said  Muhammad Zafar Kundi, Chairman of Pakistan Fisheries Export Association.

What is limiting export?

“Most of Pakistani aquatic exports are captured fishes. Unlike processed products, they faced a lot of uncertainties”, said Cui He, president of China Aquatic Products Processing and Marketing Alliance.

A net, a boat, and an engine--these are all the tools used by some for fishing. Unequipped by modern devices, fishermen are restricted by unpredictable waters and weathers. Engines can be damaged, wind may blows fast, the net can get torn, boats get broken, people get drowned... “We sometime go deep into the ocean. If we are unable to find fish, then we have to bear the loss”, complained a fisherman based in Karachi.

Temperature is another important dimension of keeping the value of captured fishes. “We are still using old methods that consume more electricity and add to the expenses. We should use the latest technology. There is only one factory that has just started working on nitrogen-based quick freezing. Other than this, we should adopt the latest automatic machinery”, suggested Muhammad Rafique Awan, CEO of Hei5 International Food Pakistan.  

“The requirements for fishing in Pakistan have not yet been met as in other countries because people are using traditional methods and they are living a hand to mouth life”, observed Irfan Ahmad, Incharge of Karachi Fisherman Cooperative Society.

“Due to this, they are not getting good prices”, Ahmad said.

Lack of fishing permit system, storing facilities, and processing infrastructure is impeding Pakistan fishermen from going up the value chain. In Pakistan, the breeding of poultry, cattle, etc. relies heavily on fish meal as feed, which comes from juvenile fish. Overfishing without sufficient supervision and control is depleting Pakistan’s aquatic resources and undermining the potential value addition from adult fish. Statistics show that over 60% of the captured fishes are wasted as they have already dead by the time they reach the market and can only be sold as fish meal. The United Nations estimates that Pakistan is losing $60 million annually due to low-value cost.

What about the farmed fishes? According to Dr. Rehana Kausar, Senior Scientific Officer of the Animal Sciences Institute NARC, Islamabad, most of Pakistani farmers “prefer to have a conventional farming system”. “Our biggest issue is fish disease diagnosis and control. Because of this farmers are unable to export their fish to the international market”. As the intensification in growing, multiple diseases are reported that await solutions.

The already-limited export is further complicated by Covid-19 restrictions. “After the outbreak of the pandemic, our exports to China decline”, said a fish exporter. Limited shipping lines, inflated rates, and corona inspection at the customs are gearing down the turnover of containers and posing higher challenges to Pakistan’s anti-pandemic efforts. Since the beginning of this year, Pakistani enterprises have tested positive in frozen aquatic products exported to China at least six times and have been suspended from import declaration for one to eight weeks. It is reported that nine out of the top fifteen companies exporting fish to China have faced or have been facing a temporary ban since January after detection of coronavirus in their shipments.

Pak-China co-op: move up the value ladder

Talking of Pakistan-China aquaculture cooperation, Cui He acknowledged the untapped potential from fishing, breeding, processing, and trade. “China’s long latitudinal span covers wide varieties from tropical to cold water fishes. We have much to offer, like technologies, breeds, feeds, equipment, etc.”, he said.

First of all, modern fishing tools can come to help. Drones, underwater fishing camera, echosounders, etc. can greatly enhances fisherman's catches and efficiency.

Furthermore, adequate post-capturing treatment guarantees the freshness and quality of fishes. “For inshore fishing, acquisition vessels, mostly provided by cold-chain logistics companies, are getting popular in China these year. With adequate freezing facilities, more fish can be saved from being wasted”, introduced Cui.

China also has some of the most advanced aquatic technologies in the world. “Our scientists have been working to introduce Chinese breeding techniques and Chinese breeds such as Trout in Pakistan. Similarly, the machinery and techniques used in the processing chain, value chain and cold chain should be introduced”, suggested Dr. Saeed Murtaza Hasan Andravi, Director Animal Sciences Institute NARC, Islamabad. 

Value addition is something the aquatic industry cannot perform without. According to statistics, Pakistan has been exporting seafood at an average unit price of less than USD 2.5 per kg from FY 18-21. In contrast, other countries in the region are exporting at at least twice that price. In this regard, “China leads the world in deep processing of aquatic products. It is the only country that can effectively utilize all the fishery wastes”, introduced Cui He. “While the flesh of the fish is consumed, its scale is made into collagen. Also, for shrimps, their main body can be eaten, and their heads and shells are processed into chitin, a substance widely used in cloth, pesticides, etc.”

Advanced deep processing requires industrial foundation and processing technologies. Both Pakistan and China boast abundant aquatic resources. Facing the Arabian Sea to the south, Pakistan has a long coastline of 840 kilometers. Within its territory, the basins of the Himalayas are strewn with rivers and lakes, which harbor over 200 kinds of inland fishes. China, with a coastline of 32,000 kilometers, produces about a third of the world’s aquatic products. Meanwhile, its imports are at a stage of rapid progress underpinned by its economic boom and upgrading consumption structure.  

More importantly, both sides are willing to conduct technological exchanges. Back in August 2009, when then Pakistani president Zardari visited China, he specifically visited the Chinese Academy of Fishery Sciences and witnessed the signing of memorandum between two institutes of the Academy and Pakistani counterparts. In 2019, a delegation of Pakistani fishery professionals visited the leading enterprises in China’s Southern province Fujian to learn about aquatic cultivation, processing, logistics, and marketing. Most recently, PARC is joining hands in training fishermen and farmers and has already building research labs and a basic feed formulating unit.

With potentially boosted quantity and quality of aquatic products, logistic obstacles can be addressed through coordination with customs. For instance, Eman Logistics, a Yiwu-based Chinese operator of China-Pakistan Logistics Line, it is communicating with customs in Yiwu to expedite the clearance procedures by bringing document preparation forward before the arrival of goods. It also noted the possibility of more logistics cooperation and investment between the two brotherly countries.