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Kinnow exports to Russia, Iran and other countries on the decline

Keeping view of various issues related to the export of kinnow (orange) to Russian and Iranian markets, this year’s export target has been revised downwards. During the current season, which started from December 1, the Pakistan has set an export target of 250,000 tons compared with last year’s exports of 280,000 tons. Pakistan would be able to export just 12.5 percent of its annual kinnow production. This year’s total anticipated production is 2,000,000 tons.

The production of kinnow during the current season is anticipated to be between 1,900,000 tons to 2,000,000 tons.

Iran like Russia is a big market of Pakistani kinnow, however, due to non-issuance of an import permit by the Government of Iran, the export of kinnow to this market remains suspended for the last six years.

Issuance of quota

Issuance of quota in December during the current season by the Indonesian government would lead to further enhancement of export of Pakistani kinnow. With the export of kinnow from December 1, 2017, as of now 800 kinnow containers weighing 20,000 tons have been exported to Russia, Dubai, Philippine, Sri-Lanka, Indonesia, Singapore, Saudi Arab, Canada, Mauritius, Bangladesh, Malaysia and UAE etc.

Indonesia’s announced the lifting of quota restrictions on kinnow imports from Pakistan, allowing shipment of an unlimited quantity of the citrus fruit to the Southeast Asian country. The announcement came during the Indonesia-Pakistan Business Forum in Islamabad, recently, which was attended by commerce ministers of the two countries.

Pakistan exported 36,000 tons of kinnow to Indonesia worth $19.8 million last year. After the removal of quota curbs, it is expected that Pakistan’s kinnow exports will increase to 60,000 tons.

Pakistani kinnow is also exported to the central Asian States via land routes, however, due to problems being created by the Afghan authorities, the export to these states is likely to be badly affected. It is necessary that the government must resolve issues by negotiating with Government of Afghanistan.

Attainment of the export target

Attainment of the export target of 250,000 tons during the current season would largely depend upon favourable weather conditions and political stability in the country. Government of Punjab should take immediate actions on war footing basis to improve quality of kinnow.

Otherwise the kinnow factories providing jobs to millions of workforce would shut down leading to a remarkable reduction of $ 200 million in export revenue.

Iran urged to allow import of Pakistani kinnows

The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has urged the Iranian government to permanently allow import of Pakistani kinnows in order to enhance bilateral trade as Iran consumes 60,000 tons of the citrus fruit per annum.

The Trade Promotion Organization of Iran allowed import of Pakistani kinnows in February last year for only two months, which he termed unfortunate.

Pakistan’s kinnow was in great demand, as reflected in previous year’s figures, and kinnow exporters may ship good volumes this year.

It will take almost a year after giving permanent permission in order to execute kinnow trade properly.

Central banks of Iran and Pakistan have already signed an agreement to forge banking links.

 

This will increase bilateral trade and address challenges as routing payments have been a big hindrance to commerce between the businessmen of both sides.

It is emphasized the need for immediate action to improve quality of kinnow otherwise the country will eventually lose part of its $200-million annual kinnow exports. The kinnow industry has been experiencing numerous issues, which has led to consistent decline in its export since 2014-15. Pakistan was able to export 375,000 tons of kinnow in 2014-15.

For the last six years, kinnow has not been exported to Iran, a big market for Pakistan, due to reluctance in the issuance of import permit by the Iranian government.

The demand of Pakistani kinnow in the international markets is on a decline as well due to its poor appearance, too many seeds and infections due to Canker. In 2014, Pakistan had taken an initiative by placing a ‘self-imposed’ temporary embargo on export of kinnow to Europe and the UK and thus averted a likely ban on import by these countries.

The Pakistan Fruit & Vegetable Exporters, Importers & Merchants Association  (PFVA) said that it has been drawing the government’s attention on the significance of research & development (R&D) for the last several years to improve quality of kinnow. But despite the fact that more than 90 area of cultivation of crops of kinnow is in Punjab, the government of Punjab has not been paying attention to this grave problem.

Export of kinnows to Russia

Due to the production of small-sized kinnow in abundance, export to Russia has assumed special significance. Recently, during the fifth inter-ministerial meeting between Pakistan and Russia, it was mutually agreed that greater access would be given to Pakistani agriculture produce and tariff and non-tariff barriers (NTBs) would be removed.

However, the concerned ministries of Pakistan would also be required to play an instrumental role for implementation of this agreement

Due to the production of small size kinnow in abundance, export to Russia has assumed special significance where this size is in great demand.

During the recent fifth inter-ministerial meeting between Pakistan and Russia, it was mutually agreed to give more access to Pakistani agriculture produces to Russian market and removal of Tariff and NTBs. However the concerned ministries of Pakistan would also be required to play an instrumental role in the implementation of this agreement.

Availing this unique opportunity, the exporters would be able to get compensation for the huge financial losses, they had sustained in this market.

Freight subsidy

The PFVA has demanded a freight subsidy of $2,500 per export container enabling exporters to encounter stiff competition from Egypt, Turkey and Morocco. To date, 800 kinnow containers weighing 20,000 tons have been exported to Russia, Philippine, Sri-Lanka, Indonesia, Singapore, Saudi Arabia, Canada, Mauritius, Bangladesh, Malaysia, the UAE etc.

PFVA has demanded freight subsidy of $2500 per export container enabling exporters to encounter stiff competition from Egypt, Turkey and Morocco.

Pakistani kinnow business continues to face stiff challenges from these countries due to the extension of freight subsidy by their governments’ devaluation of their currencies and low cost of production.

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