The country is likely to suffer a loss of over one million dollars in its foreign exchange earnings, as a result of the 15 percent freight subsidy accorded to mango exporters. Chairman Fruit, Vegetable Processors and Exporters Association, Mateen Siddiqui said that there was no need of such subsidy because there was no shortfall in the mango export to Europe.
He said that the space available for the airlift of mango to Europe was already being fully utilised. At present, space for airlifting only 6500-tonne mango was available in the flights flying to Europe, which was fully being utilised.
Since there is no shortfall in the export, the freight subsidy would only lead to reduction in the price of commodity abroad, which would ultimately result in the reduction in the foreign exchange earnings.
Explaining, Mateen said that this subsidy would not benefit the exporters but would reduce the prices of Pakistani mango in the EU markets. "I believe that the prices of Pakistani mango would come down by at least by Rs 10 to 12 per KG, which would be equivalent to approximately $1.08 million on the total tonnage exported to Europe," he said.
Mateen said that a 2.5kg box of Indian mango is being sold for five pounds in London, while the similar weight of Pakistani mango, despite being better in quality than the Indian fruit, was being sold for 3.5 pounds.
"I had opposed the decision of this freight subsidy as this would only benefit the growers of Punjab," he said and added that since the mango crop in Punjab had suffered a loss and the government in order to facilitate the growers announced the subsidy.
The freight subsidy encouraged the exporters to export more mangoes, which also raised the price of fruit in the local market, he said and added that at least Rs five to seven had gone up on one kilogram mango in the past couple of days.
To a question, Mateen said that if the growers had to be facilitated and given an incentive, the freight subsidy should have been implemented from June 01 instead of July 01 and growers of both Sindh and Punjab should have been treated equally.
The government should concentrate on increasing the space available for airlifting the commodity. Presently only five airlines operate from Karachi to the EU including PIA, Emirates, Gulf, Saudi Airlines and Ettihad. The space should be increased prior to have announced any such subsidy, he remarked.
It may be mentioned here that MINFAL had invited all the airlines to subsidise fare for the mango exporters but only the national flag carrier replied positively while the rest asked the ministry to pass on the subsidy to the exporters.
MINFAL proposed to the Economic Co-ordination Committee (ECC) of the cabinet to offer 50 percent subsidy but it accepted only 25 percent, the funds to be provided by the Export Development Fund (EDF).