Export Opportunities Kinoo
Pakistan is the sixth largest producer of mandarin hybrid and oranges in the world, with a production of 2.1 million tons per annum. Kinoo is only grown in Pakistan and its aroma and taste has obtained a good reputation and acceptability in the international markets.
The latest news is that Pakistan may lose the market of 30 to 40 per cent of its total exports of kinoo. If the government does not resolve the issue of over-valuation of kinoo by Indonesian Customs, the biggest single market would be lost. The kinoo exporters have urged the government to approach the Indonesian government immediately. The officials of Pakistan Horticulture Development and Export Board (PHDEB) and kinoo exporters expressed these views in a meeting.
The exporters want the issue to be resolved ahead of the export season, starting from November, otherwise it would result in drastic cut in kinoo export, which also means that the government's strategy to enhance the export of kinoo from Pakistan would be badly affected.
Pakistan Citrus Fruits Processors and Exporters Association has already informed the Commerce Ministry that Pakistani kinoo, under new rule of valuation of Indonesian customs, will be assessed at $10 per kg instead of $3, which would result in an additional payment of $3,346 per container.
It was also noted that although the buyers pay taxes, but ultimately Pakistani exporters have to bear these losses. The Association said that tariff of Indonesian customs is very attractive for import of fruits in Indonesia but taxes are charged at an extraordinary rate.
According to the Association Indonesian customs have given licenses to only two clearing agents that can import fruits. These two clearing agents import fruit on behalf of actual importers and frequently change their company names. Clearing agents are forced to submit high value invoices without which custom's officials refuse to accept documents. Such high value documents result in high duty and taxes.
The Export Promotion Bureau (EPB) has contacted the Pakistani embassy in Jakarta and the embassy has already taken up the issue with the Indonesian government in this regard. The EPB estimates that market of Indonesia is about 25 per cent of the total Pakistan's kinoo exports, which is also a big share for a single market.
Pakistan's total kinoo exports during July-April 2002-03 stood at $21 million (94,000 tons) as compared to $20 million (118,371 tons) in the same period of 2001-02. Pakistan fetched good price of kinoo in 2002-03 despite lesser exports in terms of quantity on account of crop damage in February due to heavy rains and sandstorm in Punjab.
Out of the total, almost half of the exports are directed to South East Asian markets, mainly to Indonesia, followed by Sri Lanka, the Philippines, Singapore, Malaysia and Hong Kong. Of the remaining half Dubai is the leading market followed by Afghanistan, Saudi Arabia and Europe. While Iran, Vietnam and Central Asian Republics, the potential markets for kinoo export, are yet to be explored.
There are bright prospects for exporting processed fresh citrus fruit, mainly known as 'Kinoo'. Kinoo fruit is a hybrid of mandarins. There is a huge demand for processed Pakistani kinoos in the international markets.
The human resource (labour) costs, in the Western Hemisphere and in developed countries, are much higher. Although, these countries now employ sophisticated farm machinery and implements, yet the production costs are on a higher side. So far, most of the countries compete only due to heavy direct or indirect subsidies offered to them by their governments and trade associations. However, under WTO (World Trade Organisation) convention, of which Pakistan is also a member country, subsidies are totally discouraged. The rising production cost and diminishing subsidies would make it difficult for these countries to compete in the international markets.
Pakistan's world mandarin and orange market share during the year 1997 was 0.9 per cent in value and 3.6 per cent in volume. The above state of affairs provides Pakistani kinoo with an opportunity to compete in the international markets, by setting more processing units.
The target customers for processed fresh kinoo plant may be the prospective and progressive fruit and vegetable exporters of Pakistan. Such exporters are those, who do not have 'in-house' fresh kinoo processing facilities, therefore they will buy fresh processed kinoo from this processing plant. Although, fresh kinoo processing plants provide an opportunity to target the international customers and export directly, but it is not recommended at this initial stage. This opportunity may be targeted in the future, once the processor has acquired sufficient export market knowledge.
The fresh kinoo processing plants do not require highly specialised operating skills. The major operational activities include sorting, washing, waxing, grading and packaging. Therefore, the larger part of the manpower accounts for unskilled labour. However, a trained plant machine foreman/mechanic is required to prevent accidental shutdowns and to carry out the routine daily maintenance. The labour is required for manual sorting, loading and packing jobs etc.
Although, kinoo is available in abundance, a regular and consistent supply of high quality kinoo during the season is of vital importance for a successful operational unit. The other important aspect is the need for strong linkage with the progressive fruit and vegetable exporters, especially with those who do not have the in-house production facility and purchase processed kinoo from the processing plants ready for export.
TABLE-1: MAJOR ORANGE & MANDARIN PRODUCING COUNTRIES (1999)
Country Area harvested Production
World 13,343 75,181
Brazil 2,615 20,079
USA 886 9,442
China 3,318 8,316
Spain 525 4,731
Mexico 818 3,788
Italy 343 2,544
Iran 384 2,476
India 321 2,000
Pakistan 473 1,990
Egypt 294 1,950
TABLE-2: EXISTING CAPACITY OF KINOO PROCESSING IN PAKISTAN
Item Total Working Idle
(Locally Manufactured) 22 20 2
(10 ton per hour) (Imported) 1 1 0
(5 ton per hour) (Imported) 5 4 1
TABLE-3: TOTAL WORLD MARKET
SIZE AND GROWTH VALUE
Quantity Compounded Growth
(000 Mt)* (1988-98)
Export 3.5 6,993.7%
Local 0.14 83.18%
Source: FAO 1998
TABLE-4: MAJOR GEOGRAPHICAL
MARKETS OF KINOO (MANDARIN) & ORANGES
Global Exports (US$ Million)
North America 495