Federation of Pakistan Chambers of Commerce & Industry (FPCCI) said Russia is one such market currently interested in Pakistan’s kinnows and potatos with have a huge potential for Pakistan horticulture sector. However, things are not going as smoothly as one expected.
FPCCI Regional Chairman on Horticulture Exports Committee, Ahmad Jawad told over the years, trade relations between the two countries, though on the rise, have never been amiable, with a tendency of suddenly becoming sour. For instance, in 2012 a Russian quarantine team that visited Pakistan’s horticulture growing areas showed its reservations on the quality of the crops and spelled out its pre-condition: that the exporters must get a certificate from a certain private laboratory in Lahore about the efficacy of the commodities being exported to Russia, in addition to routine phytosanitary certification from the Department of Plant Protection (DPP)
Though the Russians said, possessed technical expertise that no other lab in Pakistan had in conducting molecular tests. Exporters were hardly impressed as this lab was neither registered with the DPP, nor did the DPP have any credentials for this lab. The fact remains, as also pointed out by FPCCI Standing Committee Chief that the lack of close understanding between Russia and Pakistan, on quarantine protocols, has often created problems for local exporters.
Jawad briefed that latest problem between the two countries relates to the valuation of import duty on Pakistani kinnow and potato by Russian Customs which is unfair and biased. Exporters believe that if the valuation issue is quickly resolved, there can be an immense increase in exports. Citing an instance, he says that during the 2015 season the import duty imposed by Russian Customs on Pakistani potato was 61 cents/kg, while it was 48 cents on Egyptian potato. The fair cost-and-freight (C&F) value of Pakistani potato, he contended, was 36 cents/kg
Similarly, a fair valuation of C&F of Pakistani kinnow comes to 75 cents/kg, but Russian Customs fixed it at 90 cents for December 2015-January 2016, and $1.05 from February onward. Under the circumstances, exporters have to sell their kinnow at cheaper rates. The FPCCI considers it and ‘unfair trade practice’ by Russian Customs.
The problem arises from the fact that Pakistani kinnow is being compared with that of Spain and Morocco, which are highly priced for they are seedless and have an impressive look. Their kinnows are available at $10-19/10 kg while the Pakistani kinnow is sold at $6.5-7.5/10 kg. The issue of unfair valuation is a matter of great concern for Pakistani traders as the export potential of these two products to the Russian market cannot be fully exploited.
Jawad also recalled with his meeting with the minister counselor of the Embassy of the Russian Federation Dr Alexandar G Khozin and I raised, among other things, the issue of ‘unfair valuation’ of Pakistani goods by Russian Customs. The Russian diplomat, however, assured that he would look into the complaints brought to his attention and would extend all possible support to facilitate exporters to enable them to enhance exports, particularly of kinnow and potato, to Russia. His major demand was of opening banking channels between the two countries that he believed could spur trade volume up to $1 billion including signed FTA between two countries to strengthen trade which were in interest for both countries.