The impasse is causing massive losses in the poultry, cooking oil, solvent extraction, and dairy sectors, as well as contributing to food inflation’s worsening.
Currently, approximately 800,000 tonnes of soybean and canola imported in 12 ships worth approximately $500 million are stuck at port because the Ministry of Food and Agriculture has denied clearance due to the demand for a license for genetically modified organism (GMO) grain imports, despite the fact that the same grain has been imported for more than 20 years.
Pakistan has imported approximately two million tonnes of soybeans and one million tonnes of canola Since 2015.
The impasse is causing massive losses in the poultry, cooking oil, solvent extraction, and dairy sectors, as well as contributing to food inflation’s worsening. These industries employ millions of people and are the economy’s second-largest contributors after textiles.
The cargoes that were halted sparked a debate about GMO and non-GMO feed. It is the distinguishing factor between cultivation and processing.
GMOs intended for cultivation, by definition, necessitate thorough risk assessments of their impact on agriculture and the environment. Industrial processing, on the other hand, is a much simpler application that merely necessitates human and animal health risk assessments that do not need to be repeated for each country or environment.
Importing countries typically accept specific GMO traits that have been thoroughly tested by credible institutions in the country of origin. Around 40 countries import the same grains, including China, EU members, Saudi Arabia, Malaysia, Turkey, Japan, and others.
Since 2005, Pakistan has been cultivating GMO cotton, and cottonseed has been a part of our food chain. In fact, we are the only country in the world that cultivates GMOs while prohibiting their import for processing.
We have enough raw materials in the country to make poultry feed. But why would any company avoid using locally available raw materials in favor of imports, which require more financing and are more vulnerable to market volatility? Whatever raw materials are available are already in poultry feed as well as other feeds, for instance.
Corn-soybean is the most effective poultry feed formulation used globally.
There is another belief that, prior to 2015, we were producing poultry feed without the use of soybeans. That is not correct. Pakistan’s poultry feed processing landscape has never produced feed without the use of soybeans.
We were importing soybeans from India, though in smaller quantities. India has now become a net importer of soybeans.
In fact, the industry’s average Feed Conversion Ratio (FCR), which is the ratio between the feed given and the chicken’s weight, has now improved from around 2.5 to 1.5, implying an efficiency gain of up to 40%, which has been critical in keeping poultry prices at affordable levels.
Another theory was that because the vessels were unavailable, the importers switched to non-GMO sources.
Non-GMO soybeans are not commercially available. And such mills, which had stocks of non-GMO soybeans, have already depleted their supplies. Since the crisis, no non-GMO soybean cargo has been purchased.
Due to an unusually large canola crop in Australia, sellers were able to ship non-GMO canola for three contracts. Surprisingly, one of these Ukrainian cargoes was declared GMO after testing due to a lack of proper standards.
Prior to 2018, there was no requirement for a GMO license, according to the soybean import permit. Following the revision of the import permit in 2018, feed processors applied for a license to import these grains for processing, which is called “food, feed, or processing” (FFP) with the Ministry of Climate Change.
The applications typically included detailed risk assessment reports from both the exporting and importing countries, as well as other required information.
In August 2020, the National Biosafety Committee (NBC) formed a subcommittee to evaluate the applications because the Pakistan Biosafety Rules 2005 lacked a proper process for FFP applications. The recommendations of the subcommittee were approved at the 29th Technical Advisory Committee (TAC) meeting on February 2, 2022, and are now awaiting final approval at the upcoming NBC meeting.
There is still no legal framework in place for obtaining a GMO license. The procedure for obtaining a license, as well as the application forms for FFP, have not been prescribed.
The end user eventually experiences this trickle-down effect. Processors will incur losses in the future, but continuing chicken prices are worrisome. And it is only going to increase if the issue is not addressed on an emergency basis.