Pakistani Mango Exports Turn to Iranian Market

Opening of the Iranian Mango Market

In June of 2020, the Iranian Ministry of Agriculture and Pakistan’s Department of Plant Protection agreed to recognize six Pakistani companies exporting mangoes to Iran. The agreement comes at a time when both countries are looking to boost their bilateral trade volume. Currently, the bilateral trade between the two countries stands at USD 359 million, and with Iran´s recently open trade strategy, the fruit and vegetables sector will be a key sector to develop. Besides mangoes, other agricultural exports to Iran include barley, sesamum seeds, cane sugar, and oil cake.

For Pakistan, mango exports are an essential product of their fruit and vegetable trade. As the fourth largest mango producer globally, the mango industry has grown substantially over the years while now has been facing severe logistical challenges. According to Tridge’s Engagement Manager in Pakistan, Shehryar Anis, mango exporters have been encouraged to turn their exports to Iran. “Large quantities of unprocessed mangoes are being exported from Pakistan to Iran via road shipments this year. Although the suppliers are a bit reluctant to export to Iran due to payment terms, those who have channeled their payments successfully are earning good profits,” he mentioned.

Importance of Ease the Border Trade

A critical element for mango exports to grow in Iran has to do with the logistical benefits that mango shipments have. While a year ago, the border was open just three times a week and there were strong restrictions for trade, mangoes weren't included among the traded items. Besides the agreement that enables Pakistani plants to export mangoes, there is the agreement on the issuance of licenses for Pakistani trucks carrying mangoes to their final destination anywhere in Iran. This means that Pakistani mango trucks will be allowed to circulate in Pakistan until their final destination. Before, these trucks needed to unload and reload mangoes at the Iranian-Pakistani border, representing a severe challenge for the quality of the fruit.

This new cross-border agreement comes at a time when the mango industry faces serious logistical challenges with air and sea freight services used for the European and American markets. The fact that mangoes can be exported to Iran by land at a lower cost than to other markets is of utmost importance for exporters as it allows them to have a more significant profit for each shipment. However, Anis has also noted that Pakistani exporters are still reluctant of the Iranian market due to payment terms, which traders might find challenging to coordinate with their Iranian counterparts.

Iranian Market Outlook

According to the Vegetable Exporters Association (PFVA), Pakistani mango producers exported 18,000 tons of mangoes to Iran last year despite the challenge incurred from the coronavirus outbreak. In 2019, Pakistan exported 130,000 tons of fresh mangoes, while only 75,000 tons were exported last year. With the country producing about 1.8 million tonnes of mangoes annually with a target for the current season of 150,000 tons, exporters are eager to find new markets where they can expand their volumes. The boost of the Iranian market can make up for the loss of the market share in European markets due to logistical challenges.

In addition to the Islamic Republic of Iran, Canada, the United Arab Emirates (UAE), Saudi Arabia, Japan, South Korea, and China, European countries are major importers of Pakistani mangoes. Iran does not officially import any mangoes from Pakistan during 2019 and 2020 according to PFVA, the unofficial volume from irregular cross-border shipments reached at least 17,000 tonnes. With the border agreements in place for Pakistani trucks and a border customs facility in full use, the mango trade between the countries should increase drastically. It will be interesting to see how much of the increase in exports to Iran will help the 150,000-tonne target set for the end of the season.

Sources:

• Daily Times. "Pakistan, Iran agree to boost economic cooperation."

• Islamic Republic News Agency. "Pakistani Mango exporters eyeing Iranian market."

• Fresh Plaza. "Pakistan mango exporters turn to Iranian market."