Kinnow exports: removal of quota system by Indonesia to help fetch $33 million

With the removal of quota system, Pakistani exporters are estimating 60,000 tons of Kinnow exports valuing $33 million to Indonesia during this season. On Friday, Indonesia had announced that it will abolish quota system on the import of Pakistani Kinnow to improve trade balance between the two countries. Indonesia had also assured flexibility in rice exports tender by keeping the long transit time from Pakistan to ensure one million tons of Pakistani rice till 2019.
A meeting of Indonesia Pakistan Business Forum was held Friday during the visit of the Indonesian President to Pakistan in which Pakistani business community was represented by the Vice President, Federation of Pakistan Chamber of Commerce and Industry (FPCCI), Waheed Ahmed. The Vice President of the Indonesian Federation of Chamber & Commerce and the trade co-coordinator also participated in the meeting.
Stressing the need for enhancing mutual trade and removing trade barriers, the Indonesian commerce minister Enggartiasto Lukita announced abolishment of restrictions of quota system for import of Pakistani Kinnow on the demand of Pakistani exporters.
Representing Pakistani business community, Waheed Ahmed said people to people contact, direct flights options, banking facilities, exchange of trade delegations and organizing exhibitions would lead to enhancement of export from Pakistan to Indonesia up to one billion within 2-3 years.
Currently, trade between Pakistan and Indonesia stands at $2.1 billion; however export from Pakistan is limited to $138 million. Cotton thread and cotton are not part of the Preferential Trade Agreement (PTA) and similarly, the toughest quarantine requirements on meat and meat products have also been imposed while the condition of PRA for Pakistani mango has been introduced, which is tedious and time consuming. Due to these reasons, Pakistan is not exporting mango to Indonesia, he maintained.
Welcoming the decision of removing quota system, Waheed Ahmed said it would assist us to improve balance of trade while immediate implementation of this decision would double the export of Pakistani Kinnow to Indonesia during the current session.
"With the extension of this facility, export of Kinnow to Indonesia would enhance from 34,000 ton to 60,000 tons fetching valuable foreign exchange of $33 million for the country," he added..
Waheed apprised the Indonesian commerce minister when Indonesia and Pakistan signed PTA in 2015, it was assured by the former that by year 2019 one million tons of Pakistani rice would be imported, however due to unfavorable and unsuitable conditions in the tender; this volume could not be materialized.
Recently, two Pakistani companies bagged an order to export 60,000 tons of Pakistani rice to Indonesia through bidding which was anticipated to generate foreign exchange worth $30 million but since the delivery time in this tender was unrealistic because of long transit time that was not taken into account, it has become almost impossible for Pakistan to avail this unique trade opportunity.
The Indonesian commerce minister has assured us to keep this important aspect of long transit time in view for future tenders.
The Vice President of FPCCI emphasized that Indonesia shall set soft terms condition for Pakistan for trade contracts and tenders compared to its neighboring countries so that Pakistan could take advantage of trade opportunities available to the Indonesian market.
The Indonesian commerce minister has assured extending facilities to Pakistan in future tenders. Stressing the need for enhancing tourism, technology and cooperation in agriculture sectors of the two countries, he highlighted the possibility of having joint ventures between the two countries and extended offer to Indonesian investors to avail opportunities created as a result of CPEC projects .
It was also decided during the meeting that both countries will hold quarterly meetings of their respective federations of chambers & commerce so that by eliminating trade barriers mutual trade and economic relationship could be further strengthened.