KARACHI: Vice President of Pakistan Businesses Forum (PBF), Chaudhry Ahmad Jawad has said the global trade is feeling the pressure from rising costs of shipping which is also affecting the ongoing kinnow exports.
According to the report by the United Nations Conference on Trade and Development estimates that the surge in freight could increase global import price levels by 11 percent. This would mean consumer price levels would go up by 1.5 percent till 2023.
The rising shipping cost will impact the export of Pakistan’s kinnows to Canada, Russia, Ukraine, Indonesia and the Philippines. These countries account for 50 percent of Pakistan’s total kinnow export. The freight charges were between $2500 and $3000. Now, this rate has gone up to $7000.
However in the interesting development, Chaudhry Ahmad Jawad said Afghan government has imposed Rs33 per kg import tax on kinnow this season against Rs3.5 per kg of the previous year, if Islamabad doesn’t take up the issue with Kabul at the earliest Kinnow export to Afghanistan will be in shambles due to cost factor.
He said that there was a nominal import tax on the citrus in the Afghan market and the Ashraf Ghani government introduced Rs3.5 per kg tax only last year. He said that even Rs3.5 per kg tax was unjustified because lower quality or B grade fruit, costing around Rs20 per kg, is exported to Afghanistan, while the Taliban government has pushed the levy up to whooping Rs33 per kg.
In contrast, he says, Pakistan imposes just Rs6 per kg import tax on consignments of pomegranate, grapes and apple from Afghanistan, while the market rate of each of the three fruits is over Rs100 per kg here.
Pakistan exported 85,000 tonnes of kinnow to Afghanistan last year (2020-21). Similarly opening of the Iranian market by the Iranian government for citrus exports at the earliest is also required.
He quoted foreign Minister Shah Mahmood Qureshi, after his recent visit to Tehran, that the Iranian government had agreed to opening its markets for the Pakistani citrus. However, there had been no progress on the issue since then.
He said that Tehran is dilly-dallying with regard to issuance of citrus export permits and urged Islamabad to play a proactive role for resolving the issue before it is too late. He said if export permits are issued in time, Pakistan can export at least 60,000 tonnes of kinnow this year. In the past, Pakistan had been exporting up to 125,000 tonnes of citrus to Iran.
Growers will suffer financial losses if the issues related to Afghan and Iranian markets are not resolved at the earliest because exporters and kinnow polishing and grading factories will offer them reduced rates. In case the exporters suffered losses, they may also default on payments to growers, he warns.
According to him, kinnow orchard owners are already under stress because of a 40 percent drop in the fruit production this year owing to climate change and other factors and the government should take up the import tax issue on an emergent basis to save them from financial collapse.
Copyright Business Recorder, 2021
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