Government Interventions for Pakistani Mandarins

Published 2019년 9월 24일

The Pakistani government is intervening in the Pakistani mandarin sector. The export committee has determined the procurement price, and the government is trying to open up new markets for export. As such, Pakistani exporters expect exports to rise.

Mandarin Export Prices

Pakistani mandarins have been in the news recently, as the All Pakistan Fruits and Vegetable Exporters, Importers and Merchants Association (PFVA) decided it will offer a procurement price of 600 PKR per 40kg (USD 3.83) for Kinnow mandarins this year, compared to 800 PKR (USD 5.11) per 40kg in 2018. With the lower procurement costs for Pakistani exporters, PFVA is aiming to increase the margins for exporters. The reasoning behind this move was low profits earned by exporters during the 2018 season due to low export prices. In 2018, 1 USD was around 110 PKR. Now, the dollar rate has increased by around 40%, which should have also led to the procurement price to increase to 1200 PKR (USD 7.66) per 40kg.

However, according to a Pakistani exporter, Usman Rafi from Pulse International, this price set by the commission does not affect exporters too much. Last year was a relatively good year for exporters, according to Usman. Around 400K tons of Kinnows were exported in 2019, an increase of 10K tons compared to 2018. Last year, the prices for kinnows were stable, but the Pakistani rupee devalued, boosting exports more than expected.

Nevertheless, the price set by the PFVA does impact farmers heavily, as Rs600 is too low to cover most basic costs associated with farming. Usman mentions that many Pakistani mandarin farmers use a lot of conventional farming techniques, making the farming process less efficient and more expensive. Pulse International, however, invests in using the newest techniques possible, a trend that can be observed all over Pakistan. Usman mentions that more and more industry titans applying a scientific approach to farming.

New Export Markets: China, Malaysia, The Philippines, Iran

Pakistan is trying to expand its export markets for mandarins. China is often discussed as a new potential market, but Pulse International does not think that is very lucrative. Although Pakistan has signed a Preferential Trade Agreement with China, the production of mandarins in China is very high, so the competition would be too high. The Philippines and Malaysia are interesting markets on which Pakistani exporters have set their sights. The Pakistani government is trying to boost the mandarin imports in these countries with marketing campaigns.

Another development in the export markets is the increased control at the border between Iran and Pakistan. Currently, Pakistani mandarins cannot be exported to Iran. One of the reasons for this is that a lot of undocumented trade happens between the countries. Both countries have committed to erecting a fence along the border to make illegal trade more difficult. This increased border control could lead to more documented mandarin exports to Iran in the long run.