This document discusses challenges in securing the halal food supply and developing a global halal supply chain. It notes that the global Muslim population is growing and new markets are emerging, increasing demand for halal food. Ensuring integrity of halal standards throughout complex global supply chains is a challenge. Many OIC countries also face food security issues as both importers and producers. The document proposes developing a "Halal Superhighway" to better link suppliers like Australia, New Zealand, and Brazil with large Muslim populations in Southeast Asia, the Middle East, Africa, and Europe.

1. Copyright HDC 2014
World Food Security Summit 2014
24 Feb 2014
Challenges in Securing Halal Food Supply

2. Presentation outline
INTRODUCTION
Why Halal Industry?
Food Security Issues as a Driver of the Global Halal Market
Halal Superhighway – Link the Global Supply Chain
2
Conclusion
Challenges in Halal Supply Chain

3. Presentation outline
INTRODUCTION
Why Halal Industry?
Food Security Issues as a Driver of the Global Halal Market
Halal Superhighway – Link the Global Supply Chain
3
Conclusion
Challenges in Halal Supply Chain

4. 4
Source: PeW Research, HDC and Ernst &Young Analysis
Key Driver 1 : (a) Global Muslim population is 1.8 billion (23%) , (27% of total population by 2030) (b) Emergence of new markets
Emergence of new markets:
Country
Estimated Muslim Population (mil)
Indonesia
204.6
Pakistan
178.1
India
177.3
Bangladesh
148.1
China
40.0

5. 5
Market potential of Halal food in ASEAN
Many ASEAN countries still have relatively low per capita trade-able food consumption. Indicating: that future demand potential is strong. At present, per-capita chicken meat consumption in Indonesia is about 4 kg/ year. With a projected increase of per-capita consumption to 8 kg/ year in the next 7 to 8 years, implying an additional chicken meat demand of 1.3 million MT. With a growing economy, rising disposable income as well as increase in Halal awareness; Traded Halal products, especially meat and food products will also increase exponentially

6. 6
Market potential of Halal food in GCC
The six (6) members of GCC are the most important countries in the Middle-East
Competitive markets: There are “NO ENTRY BARRIERS & EXIT BARRIERS”
Total population is only about 40 million in 2011 and projected to rise 40% by 2030;
Although small in population; total imports of Halal meat into GCC countries (chicken and beef) exceeds 1 million MT annually;
Influential in issues related to Halal trade

7. 7
Market potential of Halal food in EU
Major retailers in EU such as Carrefour and TESCO are now starting to include Halal meat in their product’s assortments;
Non-Muslim Dutch consumers have shown interest in Halal food where the total demand is estimated to reach about US$ 3 billion annually;
Port of Rotterdam has a Halal dedicated storage facility
French Muslims spend about 30%-35% of their income on food products. Quantity of meat consumed by Muslims in France amounts to an average of 400,000 MT annually.
The average income of a Muslim in France is about Euro 1,220/ month. This is lower than the country’ average at between Euro 1,550 and 1,850/ month.

8. 8
Key Driver 2 : Purchasing power of Muslim is growing
“Muslim GDP per capita has grown faster annually than its global counterparts over the period from 1990 to 2010.”
Source: PWC Analysis
“Between 1990 and 2010, GDP per capita for Muslims worldwide has grown at a Cumulative Annual Growth Rate (CAGR) of 6.8% (Global CAGR: 5.0%).”
Source: United Nations, IMF, PWC

9. Presentation outline
INTRODUCTION
Why Halal Industry?
Food Security Issues as a Driver of the Global Halal Market
Halal Superhighway – Link the Global Supply Chain
9
Conclusion
Challenges in Halal Supply Chain

10. Preserving Halal integrity throughout the supply chain
10
Farming input
Farming
Manufacturing
Packaging and distribution
Retail
Food services
•Breeders
•Animal feed
•Livestock
•Poultry
•Abattoirs
•Processed foods, cosmetics, personal care, chemicals etc.
•Warehousing
•Repackaging
•Cold room
•Supermarkets, groceries, restaurants, hotels
Halal Logistic
Halal Logistics is the process of managing the procurement, movement, storage and handling of materials, parts, livestock and finished/semi-finished inventory both food and non-food through the organization and the supply chain in compliance with the general principles of Shariah Law.

11. Towards zero contamination with non-halal materials / ingredients along the supply chain
INTRODUCTION
11

12. Towards zero contamination with non-halal materials / ingredients along the supply chain
12
High Alcohol Content
Beverages
Flavorings / Colorings / Seasonings / Additives
Fermented Products
Cosmetic Products
Personal Care Products
Confectionaries

13. 13
World Demand Supply
- Halal food
Demand
Main Players
Products
Australia
Beef
New Zealand
Lamb
Brazil
Poultry
Malaysia
Processed Food, Ingredients, Non-food
Thailand
Processed Food
Supply
1.8 bil Muslim
Value USD 680 bil
Issues: Food Insecurity
•Global supply chain
•Trade (especially intra-OIC is less than 15%
Source: HDC Analysis

14. Presentation outline
INTRODUCTION
Why Halal Industry?
Food Security Issues as a Driver of the Global Halal Market
Halal Superhighway – Link the Global Supply Chain
14
Conclusion
Challenges in Halal Supply Chain

15. 15
Food Security Issues as a Driver of the Global Halal Market

16. Global Food Hunger Index
16
“Undernourishment in Sub-Saharan Africa has increased by 11.8% - highest prevalence of hunger (32%)”
“Asia and Asia Pacific has the highest number of undernourished people in the world”
(Source: FAO)
Global Hunger Index in IDB Member Countries
(Source: Global Hunger Index 2009)

17. Increasing Food and Oil Prices Impact the Supplies
17
“International food prices increased steeply from mid 2010 to 2011, raising alarm bells across the developing world about a repetition of food price crisis of 2007-2008.”
“Showing an opposite trend, food stocks has reduced and the stock-utilization ratio has increased”
(Source: Economic and Social for Commission for Asia and the Pacific)

18. Food commodities trade statistics 2009 – Majority of OIC countries are in importers category
18
Food Commodity
Producers
Exporters
Importers
• China (29.2%)
• India (21.0%)
• Indonesia (8.5%)
• Bangladesh (6.8%)
• Vietnam (5.6%)
• Philippines (6.6%)
• Nigeria (6.2%)
• EU (3.9%)
• Bangladesh (3.6%)
• Iran (3.6%)
• Thailand (30.8%)
• Vietnam (16.7%)
• India (13.1%)
• USA (10.2%)
• Pakistan (9.2%)
Market share data is provided in brackets. Countries in red indicated OIC countries.
Source: FAO
• Brazil (23.7%)
• India (11.2%)
• EU (11.0%)
• China (8.2%)
• Thailand (4.7%)
• India (11.3%)
• EU (6.7%)
• USA (4.5%)
• Russia (4.3%)
• Indonesia (4.1%)
• Brazil (47.4%)
• Thailand (9.6%)
• Australia (6.8%)
• EU (3.8%)
• Guatemala (3.0%)
• Brazil (33.7%)
• USA (33.4%)
• China (9.2%)
• EU (8.8%)
• Thailand (5.7%)
• USA (20.0%)
• China (18%)
• EU (12.5%)
• Brazil (12.0%)
• India (2.7%)
• China (16.4%)
• Hong Kong (9.4%)
• Japan (8.8%)
• EU (7.3%)
• Mexico (6.3%)
• USA (22.3%)
• EU (15.1%)
• Canada (13.7%)
• Russia (12.7%)
• Australia (9.1%)
• EU (20.6%)
• China (17.0%)
• India (11.9%)
• USA (9.3%)
• Russia (8.8%)
• Egypt (7.4%)
• Brazil (5.3%)
• EU (5.2%)
• Algeria (4.4%)
• Indonesia (4.2%)

19. The demand for Halal main food items by OIC Countries has increased tremendously within the last decade
Main Food Item
Y 2000
Major OIC Importers
6.7
Wheat
Maize
•Egypt
•Algeria
•Indonesia
•Nigeria
•Egypt
•Iran
•Turkmenistan
•Malaysia
Y 2010
14.9
(USD Billion)
2.3
8.1
Source: FAO
•Egypt
•Malaysia
•Guinea – Bissau
•Indonesia
Cattle meat
1.0
4.1
122%
252%
310%
Sugar
•Indonesia
•UAE
•Malaysia
•Nigeria
3.0
11.8
293%
Main Suppliers
19

20. Intra – OIC trade for food and ingredients is less than 15%
20
Source: OIC
Beverages & Tobacco, 0.8%
Crude materials, inedible, except fuels, 3.4%
Commodities n.e.s., 3.6%
Animal and vegetable oils, fats and waxes, 4.1%
Miscellaneous manufactured articles, 5.7%
Chemicals and related products, n.e.s., 9.7%
Food & live animals, 9.8%
Machinery and transport equipment, 13.8%
Manufactured goods classified chiefly by material, 21.3%
Mineral fuels, lubricants and related materials, 27.8%
Source: Estimates from the COMTRADE database of the United Nations (2008). * Since not all countries have yet reported their trade statistics, mirror statistics were used to the extent possible to obtain more accurate results.

21. Presentation outline
INTRODUCTION
Why Halal Industry?
Food Security Issues as a Driver of the Global Halal Market
Halal Superhighway – Link the Global Supply Chain
21
Conclusion
Challenges in Halal Supply Chain

22. Halal Superhighway link the global Halal supply chain
New Zealand
Australia
Qingdao, China
Xinjiang, China
•Beef
•Dairy products
•Processed food
•Livestock
•Rice & Maize
•Maize
•Sugar
•Soybean
•Rice
•Cassava
•Chicken
•Livestock
•Wheat, Maize & Rice
•Fruits
•Olive oil
•Potatoes
•Vegetables & fruits
•Vegetables & fruits
•Maize
•Yams & Cassava
•Poultry
•Maize
•Animal feed
Brazil
22
•Dairy products
MIDDLE EAST
Ensuring a controlled and efficient supply of Halal products to Muslims all over the world
Europe
750 million population (6% Muslim) High purchasing power
Ningxia, China
Indo-China
MALAYSIA
Indonesia
South East Asia 500 million population (50% Muslim)
North Africa
Nigeria
Africa 1 billion population (40% Muslim)

23. Presentation outline
INTRODUCTION
Why Halal Industry?
Food Security Issues as a Driver of the Global Halal Market
Halal Superhighway – Link the Global Supply Chain
23
Conclusion
Challenges in Halal Supply Chain

24. 24
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Discussion / Q&A
Conclusion
•1.8 billion Muslim population. Supply for Halal food and non-food products is not enough to cater the demand.
•Challenge is to develop a more robust and efficient global supply chain benefitting Muslim world
•Hence, opportunities are enormous.