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How to boost apple exports?

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Public-private sector partnerships may boost apple exports

Sep 27 - Oct 03, 1999

Top officials of Ministry of Food and Agriculture, responsible for growth and development of small and large crops, have been advised by the government to prepare a comprehensive report about their respective areas suggesting steps for rapid improvement in the farm produce in Pakistan.

The directive, issued by Prime Minister's Secretariat to the Ministry of Agriculture, is aimed at identifying the factors restraining growth and to suggest immediate steps for consolidating agricultural resources in the country. The matter is being treated as urgent with a view to optimize benefits of the farm sector.

Working in line with this policy, the Pakistan Industrial Development Corporation (PIDC), in collaboration with the private sector, has planned to increase the export of apples from Balochistan and to introduce modern technology and know-how in the region for post harvest treatment of fruits. At present no modern facilities for processing apples exist and thus exports of apples are limited to 2000-3000 tonnes against the production of over 400,000 tonnes from this province. The PIDC has short-listed four parties as potential joint venture partners. The final touches to the joint venture agreement have already been given and a formal announcement is due sometime next month.

Financial plan

The project would be financed at 60-40 debt—equity ratio. PIDC and Export Promotion Bureau (EPB) together would contribute a total of 50 per cent equity while the balance would be contributed by the private partner. The Balochistan government is also required to share 10-15 per cent equity. The overall management of the project would, however, be looked after by the private partner. The debut would be arranged through investment banks and other financial institutions. Initial discussion for raising funds has been made with Pak-Libya Holding Company, other investment banks. The machinery would be imported from a European country preferably against buyers credit. Tentatively the project would go into production in August next year.

Apple production in Pakistan

Balochistan 466,000 tonnes 84.19 per cent of the total

NWFP 85,000 tonnes 15.36 per cent

Punjab 2,3000 tonnes 0.41 per cent

Sindh 2000 tonnes 0.04 per cent


Apple producing areas in Balochistan

The climate and hilly environment of Balochistan have placed the province as the major producer of apples in Pakistan. Following areas of Balochistan are known for producing quality apples:

Pishin 98,397 tonnes

Zhob 81,474 tonnes

Loaralai 51,679 tonnes

Quetta 43,917 tonnes

Kalat 42,193 tonnes

Ziarat 41,46 tonnes

Killa Saifullah 31,292tonnes

Mastung 21,595 tonnes

Khuzdar 16,481 tonnes

Other areas 37,474 tonnes


Production of apples in the world

The global production of apples is estimated over 41 million tonnes mainly by China, US, Russia and Central Asian States. The leading apple producing countries in Europe are France, Germany and Italy. Most of the crop is processed as either cider or brandy. Apple production in the US in the mid 1980s was about 9 per cent of the total world production. Washington is the most important apple producing state of the US. Next ranking in descending order are New York, Michigan, California, Pennsylvania and Virginia.

Market for Pakistani apples

Pakistani apples have a considerable demand in the Middle East as well in the Far Eastern countries. However, this cash crop has yet to achieve the height it deserves.

The export volume of apples is comparatively too low mainly due to lack of modern facilities processing, grading, waxing and polishing of the fruit. Pakistan exported 5,084 tonnes during July-March 1998-99.

After meeting the domestic demand an exportable surplus of 100,000 tonnes of apples is available in Pakistan.

Pakistan earned $ 372,700 by exporting 127 tonnes of apples during 1995-96. Export earnings were estimated at $157,000 by exporting 536 tonnes in 1996-97, and $ 429,000 by exporting 2,120 tonnes in 1997-98.

Despite lack of processing facilities, the gradual increase in apple exports are encouraging signs for the private sector investment in this sector.

The project to be set up in Balochistan has an export plan to progressively enter into export market. During the first year of its operations, the export target is 10,000 tonnes, which is to be increased to the level of 15,000 tonnes during next five years.

Estimated on the basis of increasing trend in apple production and high post harvest losses that 50,000 tonnes of apple can be taken out for export without disturbing prices in the domestic market.

Currently the major players in the export market are Iran, Chile, USA, Lebanon, Turkey, Australia, France and India.