PHDEC's timely efforts: Iran reverses higher valuation, customs duty decision

Timely efforts of Pakistan Horticulture Development & Export Company (PHDEC) have resulted in Iran's gesture of withdrawing higher valuation and customs duty on its imports resulting in kinnow exports escaping a disastrous season.
According to Hortimag, the newsletter of PHDEC, in the second week of October, Iranian authorities had raised basic valuation of kinnow import by over 300 percent from $400 to $1,300 per ton. Customs duty on kinnow was increased by more than three times, rendering Pakistani kinnow totally non-competitive in the market.
Concern was expressed throughout the export chain, and the exporters raised their voice after calculating the financial cost as a result of the unilateral Iranian decision. Shahid Sultan, a leading exporter, claimed that the decision would affect 70 percent fruits of Bhalwal area, the main kinnow growing area.
Over 200 processing factories, operating in Sargodha district, would also have to close down as their working entirely depended on kinnow exports to Iran and render thousands of workers jobless. Most of the exporters had stopped procuring fruit because the entire process had become uncertain, he said.
The exporters approached the government to move through the Ministry of Commerce and PHDEC before the formal start of the export season and try to get the decision reversed. It was suggested that the Ministry should constitute a delegation, comprising government officials and exporters, to visit Iran and resolve this issue immediately, else the huge increase in customs duty would spell financial disaster for exporters and farmers.
Considering the gravity of the issue, PHDEC contacted Pakistan's Commercial Counsellor in Iran to intervene on behalf of the exporters and PHDEC. Much to the satisfaction of the exporters, as a result of these efforts Iranian authorities withdrew the decision within two weeks of its announcement and the valuation per ton was reverted to $400 per ton, instead of $1,300 per ton. Customs duty thus also dropped back to the pre-decision level.
Exporters and growers have welcomed the move and expressed hope that they would not only maintain their last year's kinnow exports to Iran but would also cross the same.
Kinnow exports to Iran during 2008-09 amounted to around 50,000 tons, valuing $13 million (provisional data). In 2007-08 it was 70,000 tons. Meanwhile, PHDEC and All Pakistan Fruit & Vegetable Exporters and Merchants Association (APFVEA) have made registration of kinnow exporters compulsory with the latter, which would allocate a registration number on the basis of his pack house appraisal.
The Government of Pakistan would also notify compulsory registration for kinnow exporters. The registration process, being pursued on trial basis, would initially cover those exporters who send kinnow to Iran and Russia. It has also been decided that commercial exporters could rent pack houses for appraisal so that a level playing field could be ensured for all exporters.
The pre-shipment inspection would be made compulsory for all registered members, which shall be done as per Pre-shipment Inspection (PSI) scheme of PHDEC; involving a third party.
A meeting of all stakeholders was recently arranged at Citrus Research Institute, Sargodha, for the launching of Rind Blemish Project. It was jointly presided over by Chief Operating Officer of PHDEC Muhammad Iqbal and Muhammad Azam, Chairman, Citrus Processors and Exporters Association (CPEA).
It was agreed by the participants to start the first phase of the project from Tehsil Kot Momin, which was considered to be the worst affected area. During this phase, some 25,000 acres would be treated. The CPEA Chairman stressed that citrus rind blemish effort should focus on wind break arrangements around the orchards. Wind scars, he said, have become a major reason of citrus rind blemish in the area.