20000317

Consumer food

imports

growing apace

KARACHI: Despite downturn in the economy, Pakistan's consumer food imports are growing at a faster pace and hold potential for increased US exports of retail food items and edible fishery products, said Foreign Agriculture Service of USDA.

Popular imported food items include juices, canned fruits, sauces, honey, coffee, candy, condiments, nuts, dressing, snack foods, powdered milk and other dairy products, including ice cream. Health and dietary food items are growing in popularity.

Sources estimated that more than half of consumer food imports are not reported officially. Supermarkets, which are expanding at the expense of traditional wet market and small independent shops, now account for about 10 percent of all retail foods sales. In addition, numerous western-style fast food chains have opened in the country and becoming increasingly popular.

With an estimated 150 million consumers, Pakistan is the world's ninth largest market.

Economic growth which averaged more than five percent annually for the past decade, slowed last year as a result of the Asian financial crisis and economic sanctions imposed following May 1998 nuclear tests.

One of the major objectives of the present government is to restore investors' confidence and implement broad economic reforms, with the aim at stimulating growth. Although the per capita income remains low about $450. There is a large and growing consumer class Ñ estimated at about 25 percent of the total population.

Major changes are beginning to occur in Pakistan's food sector as lifestyles and traditional eating habits begin to change. The value of processed retail food sales has grown 12 percent annually during the past decade. Currently, it is estimated at about $1.1 billion including about $250 million worth of imported consumer food.

Although tariffs on consumer foods have declined over the past few years, they remain relatively high. The maximum duty on consumer food items is 35 percent and average about 25 percent with additional 15 percent sales tax on most imports. Tariffs are still high and require further reduction.

Currently, direct imports of US retail food products account for about one percent of Pakistan's total imports of consumer-oriented food products. Although US exports of consumer food grew 48 percent during 1999 to about $2 million. US products continue to face stiff price competition. Consumers prefer a number of US products including processed fruits and vegetables nuts, snack foods, breakfast cereals, dairy products, sauces, peanut butter, microwaveable popcorn and eggs and products.ÑPPI