Kinnow exports are destined to fetch $200 million this year as exports are expected to surpass previous year's target, the reason being that commercial prices seem to be a bit on the average side, according to Ahmad Jawad, CEO of Harvest Trading. However, it will be confirmed at the time of price negotiation, he told Business Recorder on Wednesday.
He, however, pointed out that due to lack of adequate facilities and proper training of picking and packing, every year the crop's production becomes victim of post-harvest losses. The recent monsoon rains had come at the proper time, giving good quality of the fruit. Orchards' health is great, which is lush green, and full of fruits. Good quantity as well as quality is expected this season. The grain is juicy and good in weight, he said.
"In the upcoming season, which starts next month, there are encouraging reports about production, which is likely to range around 0.3 million tons, and there stand strong prospects that the country's exports would surpass previous year's figure". He claimed that the national exchequer stands to earn up to $200 million, if the exports cross 0.3 million tons. However, shipping companies caused losses worth more than $0.35 million last year to the exporters because of delays in shipment, and the latter pray that a similar situation may not be created this year as well.
Middle-East countries, Iran, Bangladesh, Eastern Europe, Russia and Ukraine are potential buyers, while Indonesia and Malaysia have also emerged recently as strong buyers. Over the period of time, Russia and Ukraine have also emerged as leading importers of Pakistani oranges as total exports to both countries now contribute almost half of Pakistan's total exports. According to a recent study, between January and April 2011 the citrus import volume in Russia noted a 29 percent increase, compared to the same period in 2010.
The Russian market, which has remained unexploited in letter and spirit, has a huge potential and offers a big market for the export of Pakistani citrus. "We must focus through proper banking channels in the FY 2011-12 as without proper banking channels and building strong relations with Russian counterparts we might lose this good market very soon," Jawad said.
He said that during the current year Indonesia has agreed to do away with 25 percent import duty on Pakistani kinnow to reciprocate Pakistan government's gesture of making a downward revision on import duty on palm oil. There are examples in the world, like Chile, Holland and Thailand, which multiplied their horticulture exports within a few years, taking to billions of dollars. Given Pakistan's natural endowments -four seasons and fertile land-it is surprising why it cannot learn from their experience and increase exports to 20 to 30 percent of domestic production.
The Harvest Trading CEO highlighted that with the imposition of new tax by Sri Lanka recently, the duties on many export items from Pakistan have been doubled. Duty on Kinnow has increased from $2.19 per 13 kg to $4.47 ,which is negative for this year's kinnow season. This is the kinnow season, so the decision would affect the exports of this citrus fruit." He urged the Sri Lankan government not to enhance duties on agriculture products from Pakistan.
He also briefed that the University of Agriculture, Faisalabad,h as also been working on the proposals of the stakeholders to improve and maintain quality of the fruit. The proposals include enforcement of quality and grading standards, pre-shipment inspection and some incentives like subsidies on airfreight etc for those exporters who would voluntarily present their goods for inspection. Training programs would also be organised for the growers, processors and exporters by holding various seminars and workshops and creating awareness among the stakeholders on the EurapGap and HACCP (hazardous analysis for critical control point) and motivating them to implement these standards.
Ahmad Jawad emphasised that this year more than 200 pack houses will be in action with production of about 8000 metric tons per day, adding that commercial exporters were supporting kinnow industry and sharing main business risks of common processors. Meanwhile, he said, kinnow is being exported to all destinations, and permission for kinnow import in Iran at a meagre 4 percent duty will be a great opportunity for Pakistani exporters and they have availed it fully by sending huge consignments to Iran.
He regretted that export financing is not available as banks often hesitate financing this trade, being perishable in nature. He recommended that finance facilities may be provided to exporters. Owing to bulkiness and short shelf life of the products, freight is major component of the C&F cost. Freight from Pakistan is more as compared with Pakistan's competitors in the region like India.
He suggested that banks may provide finance to SMEs on cash flow base lending rather than security and collateral requirements, which would greatly help the SMEs to overcome their financial problems and they would be able to develop their business with the support of banks.
Leasing facility may also be provided to exporters who will establish cold storage houses near clusters of production. Refrigerated vehicles on lease terms are also recommended to strengthen transport network from clusters to seaports. Jawad linked growth of kinnow industry to the removal of middleman, saying that exports of citrus fruits could be enhanced manifold provided the farmers are accorded direct benefit. "Exports could be increased further if all the stakeholders remove the role of middleman and strengthen the farmer input who is the real stakeholder of this emerging industry," he said, adding that at this point, Pakistan is earning huge foreign exchange from the export of Kinnow. There is capacity to increase this amount.
At present, there is little or no government intervention and assistance. There are no export zones, no dry ports, and not even adequate natural gas to power factories. Punjab Government should announce Tehsil Bhalwal and Kot Momin as Export Processing Zone due to its territory. He also requested the Chairman of Export Processing Zones Authority Karachi to expedite this important issue with the provincial government.
On the question of Seedless kinnow, he said, "We are looking forward having 3-5 seeds each as compared to 20 to 25 seeds each piece, which was the sole reason behind the neglected importance given to them by the European markets but this problem has finally been resolved and their demand would be met".
He said that Pakistani agricultural scientists are working hard on mass production of seedless kinnow fruit in Pakistan "but we need early variety in 3 years' time maximum and same exotic taste in seedless kinnow. We should, therefore, wind up current seed kinnow from the farms". The Harvest Trading CEO estimated: "Once the seedless varieties start bringing fruit, it will help generate precious and much-needed foreign exchange for the country, going up to $1 billion extra through export".
He further demanded that a detailed conference of one week should be called on 'Exports and future plans of Pakistani Kinnow' with the participation of all stakeholders from the government and private sector so that the issue relating to post-harvest losses, lack of infrastructure in terms of modern labs and pack houses issue should be highlighted with solution.
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