Global demand: Vegetable exports plummet 40% in 2012

By Kazim Alam, The Express Tribune

KARACHI: After growing at a steady rate in the last decade, Pakistan’s vegetable exports have suffered volumetric year-on-year decrease of 40.4% in 2011-12, according to Pakistan Bureau of Statistics (PBS).

The drop in vegetable exports is a consequence of natural disasters, unfair profiteering by middlemen and a change in supply and demand dynamics in foreign markets, All Pakistan Fruit and Vegetable Exporters, Importers and Merchants Association Co-Chairman Waheed Ahmed told The Express Tribune.

“The significant drop in vegetable exports is mainly because the onion crop was destroyed by floods,” Ahmed stated. Pakistan exported about 150,000 tons of onion from December 2010 to March 2011. However, during the corresponding period in 2011-12, Pakistan’s onion exports came down to about 1,000 tons only.

Pakistan fetched $180.6 million by exporting edible vegetables in fiscal 2011-12, according to the PBS data. Their exports increased at 42% annually between 2007 and 2011, as per the World Trade Organisation (WTO). Notably, the rise in the country’s vegetable exports between 2010 and 2011 alone was a staggering 117%.

One of the reasons for the unprecedented hike in vegetable exports in 2010-11 was the shortage of potato in Russia. Pakistan exported 125,000 tons of potato to Russia in 2010-11. The figure dropped to roughly 15,000 tons in 2011-12, a decrease of well over 700%.

“Besides a supply-side change in the Russian vegetable market, another reason for Pakistan’s low vegetable exports in 2011-12 is exorbitant profits charged by middlemen and growers,” Ahmed said, adding that he had received an export order of 20,000 tons from Russia, but cancelled it because of artificially inflated prices in the local market.

Fruit exports: a better picture

The situation is slightly better in Pakistan’s fruit export market, as it grew by 8.1% between 2010-11 and 2011-12. However, production of one of the highest exported fruit, mango, dropped to 1.3 million tons in the most recent season compared to last year’s production of 1.8 million tons, representing a decrease of 38%.

Low mango production was followed by no mango export to the US in the ongoing season, which is about to end in a month. Pakistan’s mango exports to the United States were 80,000 tons last season.

“There’re some serious logistical issues as well. Pakistani mangoes are supposed to go to Chicago first, so that they can be treated in accordance with American food laws,” he said.

Major international markets for Pakistani fruits are Russia, UAE, Saudi Arabia, Muscat, UK and Iran. Out of the mango export target of 150,000 tons for the current season, approximately 30,000 tons were supposed to go to Iran.

However, Pakistan’s fruit exports to Iran have so far been zero because of the trade restrictions recently imposed on Iran by international financial institutions. While the season is nearing its end, only about 110,000 tons of mango exports have been achieved so far.

Pakistan’s exports of edible fruits, nuts, peel of citrus fruit and melons have grown at an annual rate of 27% between 2007 and 2011. With the share of 0.4% in total global exports, the value of Pakistan’s exports in this category was $311 million in 2011, according to the WTO. The PBS puts the fruit export figure for fiscal year 2012 at $358.2 million.

“The government should provide exporters with a fair estimate of production at least two months in advance. It doesn’t do this in all fruit and vegetable categories, which results in a loss of foreign exchange for the country,” Ahmed said.

Published in The Express Tribune, August 18, 2012.

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