Pakistan started its kinnow export season last Thursday, with a mix of positive and negative factors. Exporters and officials believe that exports might cross the figure of 0.3m tonnes. The government has, however, fixed a target of 0.6m tonnes.
The field reports suggest a huge leap in the fruit quality. Three crucial months September, October and November went almost dry, saving the fruit from many pests that normally come with moisture in the air. Officials have quantified a 20pc quality improvement in the standing crop.
The absence of pests has reversed the ratio of A-Grade and B-Grade fruits in orchards.
This year, 60pc of the produce is A-Grade (exportable) quality at the start of the season, but the ratio is expected to improve as the entire crop races towards maturity. With fixed cost of labour and improved crop quality remaining the same, the farmers and exporters might see a rise in profits.
The quantity of fruit, however, is a matter of debate. The farmers and exporters linking the situation to dry weather feel that Pakistan may have to be content with 2m tonnes against the normal 2.2m or an occasional 2.3m tonnes of output. They have also cited a marginal increase in the market price, a sign of low supply.
Last year, the exporters were offering Rs700/40Kg. This year, it has already gone up to Rs750, and the rate may rise further in days to come.
But officials of the Pakistan Horticulture Development and Export Company (PHDEC) think that the quantity is not less, and maturity is taking time due to weather which has delayed colouring and harvesting of the fruit. Even if this less quantity argument is accepted, it could not, in any way, impact the export figures the exports range between 12-13pc of the total production.
In export, the price matters more than the quantity, and the value is certainly set to increase correspondingly with an enhanced quality. Based on PHDEC’s assessment and some farmers agree, the final figure might be close to 0.4m tonnes.
The Afghan buyers, who normally swarm the Punjab’s kinnow market by this time, are missing so far. Farmers feel that new trade and visa processes have caused a delay and the government should rethink its policy priorities for the Afghan market which is almost a natural extension of the domestic market. Officials, however, do not agree and say it is due to the supply issues.
Pakistan does not have as much low-quality (smaller fruit) as the Afghans purchase. Pakistan itself has a huge market for that kind of fruit. So, the farmers are avoiding the Afghan buyers as they can sell this fruit on cash in the domestic market. This may hurt export to Afghanistan.
The new trade process only demands registration of each vehicle crossing the Pakistani border against the earlier requisite of quantity-based permits, regardless of the transportation mode.
This issue of short supply of small-sized fruit may also hurt the Russian sale prospects for the Pakistani Kinnow. The Russians, along with some Central Asian states, absorb almost 25pc of our kinnow exports all in small size. How exporters meet their orders from Russia would largely decide the final export figure. Exports to Iran remains a grey area. Owing to banking problems and hindering cash transfers between both the countries, Dubai serves as conduit for most of the exports doubling the duty charges and rendering the export process commercially unattractive.Moreover, Iran insists on barter of apple for kinnow. On top of it all, the Iranian domestic kinnow lasts till January, leaving only a small period of February for Pakistan as the season runs out by the end of that month. Iran, together with Afghanistan, used to consume over 0.2m tonnes or over 60pc of the export.Keeping in these factors in mind, Pakistani policymakers should advise their relevant institutions to explore new markets.