Mango exporters are bracing themselves for losing the
top foreign markets to competitors in the region as well as extremely
low profit margins despite expectation of a substantial quantity-wise
increase over the previous year. There is also fear that increased
volume of mango export this year would not translate into improved
foreign exchange earnings due primarily to shedding of value by dollar
against the rupee.
Talking to PAGE, a Karachi-based fruits and
vegetables exporter Mateen Siddiqui said that not only the prices of
mango this year are on the high side but the freight has also registered
a substantial increase. These two factors have pushed the export prices
of the Pakistan's signature fruit in the international markets to a
level which is uncompetitive against exports from all other rivals, most
of whom are located in the region.
Mateen, who is also the chairman of Fruits &
Vegetables Processors and Exporters Association, attributed the high
mango prices to substantial increase in the prices of farm inputs —
pesticides, insecticides, fertilizer and urea. In addition, he also said
that increase in prices of such associated costs as petroleum,
transportation and electricity have also contributed to increase in
"But the high mango prices are just a part of
the reasons rendering the export prices of Pakistani mangoes
uncompetitive in the foreign markets — the primary beneficiaries of
which would be India, Thailand, Indonesia, Thailand and Philippines.
While the national flag carrier Pakistan International Airlines (PIA) is
charging a comparatively less freight compared to foreign airlines, not
only they are still too high but the air spaces are also limited. For
instance, the PIA is charging Rs 72 per kilogram the foreign airlines
are charging an airfreight of Rs 85 per kilogram. The uncompetitive
prices, however, are feared to lose a portion of its most premium market
UK to such competitors as rival India, Brazil and Mexico, Mateen added.
Asked if the absence of dedicated freighter service
by the PIA this year and the increased freight charges by the national
flag carrier and the foreign airlines would have a negative impact on
mango exports, Mateen said "No." "In fact", he
added, "it would help the exporters not to 'dump' the fruit in the
premium-priced markets like the UK thus ensuring to fetch the premium
price. However, it would result in reducing the mango exports by air
between 20-25 per cent while boosting the exports through sea by around
25-30 per cent, which makes little difference as far as the shipment of
the fruit is concerned."
Mateen said that water shortage has taken a heavy
toll on mango crop this year, particularly in Sindh. "It rendered
Sindri, a variety grown particularly in Sindh, unacceptable in the
international markets as shortage of water did not let it grow to its
regular shape and size. However, situation in Punjab, which produces 70
per cent of all the mango crop in the country, was not as bad and thus 'Chaunsa'
crop has faced no problems as 'Sindhri'."
Mateen claimed that though the high mango prices and
increased air freight have forced the exporters to increase the prices,
the same would not translate into increased foreign exchange earnings
for the country or even enhanced profits for the exporters. "For
instance, last year the average price of our mangoes to the Far East was
around $ 5.50 per 5 kilogram box. This year, we were forced to increase
the price to $ 6.25 per 5 kilogram to the same market. However, this
substantial increase of price by 75 cents, which is feared to render our
fruit incompetitive in this particular market, today translates into Rs
370 compared to Rs 352 last season when dollar was strong. In addition,
the dollar keeps on shedding its value against the rupee and if the
situation persists it would mean further erosion of exports earnings and
even more reduced margins for the exporters.
"Last year the mango prices were low, the air
freight was comparatively cheaper and the dollar was strong trading at
Rs 64. This season the exporters have to pay more for the fruit, the air
freights have gone up while the dollar has shed a substantial portion of
its value against the rupee. Though the exporters are forced to absorb
the increased prices of the fruit and the air freight they are unable to
revise their export prices upwards due primarily to fear of rendering
their product absolutely incompetitive in the international markets for
fear of losing. While they are paying increased prices and air freight
they are earning less in terms of rupees."
However, the search for finding new markets for
mangoes continue as Mateen told PAGE that he is flying to
Ashkabad, Azerbaijan and Almati, Qazaqistan on a four-day visit to
attend mango show and seminar. The visit of the four-member delegation
is organized by the Export Promotion Bureau and is aimed at promoting
mangoes in the two countries.