Hey, have you wondered why the price of whey protein in Pakistan is so expensive now? It’s not just you, people all over the world, are baffled.
You might be thinking: “What gives, protein powder companies?”
Well, there are country specific factors at play, but mostly it’s some universal factors. It’s a real head scratcher if you ask us, but worry not! We’ll do our best to explain it in a way that won’t make you want to pull your hair out.
Let’s get into each factor one by one, so that you as the consumer are fully aware of what’s going on in the world of whey…
IMMENSELY DIFFICULT IMPORT RESTRICTIONS:
We hope that you’re pretty well versed with the current economic situation in Pakistan. The country is nearing a risk of default, and we have little to no dollars left for import.
For protein supplements, this is bad, bad news.
Because Pakistan doesn’t make its own protein powders. Not even one. We do not have the infrastructure available anywhere in the country. Everything gets imported from places like the US, Europe, etc.
And because we don’t have enough dollars to pay, banks aren’t helping a whole lot too. You see, banks aren’t paying up and that means that companies can’t pay for their shipments.
So, the protein powder just sits there, stuck at the ports, waiting for clearance. Months pass on, nothing happens.
Either way, we’re facing a massive shortage of whey protein throughout the country. Retail stores are running out of stock. Demand is high, but supply is EXTREMELY low.
And as a result…prices have gone WAY up.
Also, the customs duties paid on whey protein are at an ASTRONOMICALLY HIGH of 78% . This means that if the cost of a whey protein stock is Rs 10 lakh…
We have to pay an extra Rs 7.8 lakh in custom duties!
And unfortunately, to keep business going, the customer has to absorb this cost. It has become way too high for businesses to bear.
So there you have it, folks. It’s not exactly smooth sailing when it comes to importing whey protein into Pakistan at the moment. There are plenty of hurdles to overcome and hoops to jump through, making it a real challenge for anyone trying to get their hands on it.
SUPPLY CHAIN DISRUPTIONS AND FREIGHT COSTS
Freight costs have increased 10x since the COVID 19 pandemic. To explain why, let’s rewind to the early pandemic days…
When the pandemic first hit, countries closed their doors to the outside world. And because of this, the trade for a lot of goods halted.
You know how important shipping containers are for moving things around, right? Well, unfortunately when countries shut down, a lot of these containers got stuck in countries around the world.
And without shipping containers, you can’t really…ship anything. (thanks captain obvious)
This led to mass shortages of all kinds of goods, including protein powders and supplements. Now, when things started to ease up, countries started trading again. The only problem?
There were no shipping containers! They were stuck at the ports.
For trade to begin again, these containers needed to return to the origin country first, before use in anything else.
The result? Demand for containers shot up, while the supply remained limited. And as any economics student will tell you whenever demand is high, and supply is low, prices shoot up.
That’s exactly what happened here – sea freight costs went up big time. And unfortunately, the final price of your favorite protein powder has to include these costs.
Therefore, a major reason why prices of protein powder have become so expensive is because there simply weren’t enough shipping containers to move them.
Fuel Costs and The Russian-Ukraine War
In todays world, you probably internally scream whenever you have to fill another tank of gas. (fret not, we do it externally. The gas station employees run away whenever they see me coming :’) )
But, it’s not just us. This massive hike in fuel prices is happening globally. And it has everything to do with the Russian-Ukraine War.
Without going into much depth about it, here’re 2 main reasons why this conflict has caused a global fuel crisis…
Disruption of natural gas supplies:
Ukraine is a key transit country for Russian natural gas exports to Europe. This conflict has led to disruptions in natural gas supplies. Russia has cut off gas supplies to Ukraine during disputes, leading to shortages in Europe.
The threat of such disruptions can lead to increased prices and uncertainty in the global natural gas market.
Sanctions on Russian oil and gas:
The conflict has also resulted in sanctions on Russia, including restrictions on oil and gas exports. Sanctions on Russian oil and gas lead to increased prices, such as you’re seeing now in Pakistan.
Pretty much every mode of transport we have relies on fuel, including freight ships. And when the cost of fuel goes up, the cost of running those ships goes up too.
And what happens then?
Yes, you guessed it right. The cost has to be included in your final product price. It’s just the unfortunate reality of a world that runs on fuel.
Global Dairy Crisis
If you didn’t know, whey protein comes from milk. We’ve got a whole other article that explains everything about it, but here’s a short summary:
- Milk gets treated with an enzyme that causes it to separate into 2 parts. Liquid whey, and milk solids.
- The milk solids are used to make cheese. The remaining liquid passes through many layers of filtration.
- It is then spray dried i.e. dehydrated, leaving a high protein, low-carb, and low-fat powder. That my friends, is what you call protein powder!
Here’s another little fun fact for you. Pakistan doesn’t exactly have the most booming dairy industry. So, when it comes to producing whey, we have to rely on the big guns, mainly the USA and Europe, to get the job done.
In the past, whey protein was a surplus product with wide availability. But like many others, the whey protein supply chain broke down when lockdowns hit.
For top dairy-producing countries, this meant having less manpower available to manage farms. It also led to manufacturing plants having massively delayed production schedules.
As a result, many plants even had to shut down. This was the start of the scarcity of dairy. But that’s not all.
Mass restaurant closures caused unprecedented drop in the production of cheese. Manufacturers began to curb cheese production supply. And as mentioned earlier, you know that whey protein is a byproduct of cheese.
So, less cheese means less liquid whey!
But it doesn’t end there…
Erratic climate change significantly reduced milk yield worldwide. Simply (and sadly) put, cows were too STRESSED to produce enough milk. Can you believe that?!
As funny and strange as this sounds, it was TRUE. Combine all these factors, and you land yourself with a serious whey crisis.
We bring our supply and demand concept here again.
When you have a HUGE demand, but dangerously low supply…
Price of the product goes UP.
And in just the past two years, the price of whey protein has doubled. And to add insult to injury, manufacturers have to contend with rising fuel costs, inflation, and all sorts of other headaches. It’s just too much for the old retail prices to handle.
As a result, practically every supplement brand out there has had to hike up the cost of their whey protein powders. Hence why protein powder is so expensive now.
Take home message:
We hope this short guide provided you an insight into the actual why on whey protein’s rising prices. Not many companies talk about it or want to disclose it to their customers. But we believe that customers are the fuel to any company, and no matter how expensive real fuel gets, a true customer is always worth retaining.
That was a poor attempt at trying to make you emotional :’)
But anyway, if a friend ever asks you why protein powder has become so expensive…
All you have to do is remember the following mnemonic:
I – Immensely Difficult import
S – Supply chain disruptions
F – Fuel costs and the Russian-Ukraine war
G – Global dairy crisis
ISFG: Is For Good.
Alternatively, you could just share this article with them?
P.S. if you’re looking for a protein powder that you won’t leave you broke, and also doesn’t taste like grainy cardboard…
Here’s a great option.