Horticulture products: Unfair trade practices hinder exports to Russia

Published: August 12, 2017

LAHORE: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has identified Russia as a potential destination for fruit exports from Pakistan, noting, however, that barriers to trade are making the exercise difficult.

FPCCI Horticulture Exports Committee Regional Chairman Ahmad Jawad said trade relations between the two countries, despite growing substantially, have never been amiable and have a tendency of suddenly becoming sour.

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He quoted a 2012 incident as an example when a Russian quarantine team visited Pakistan’s horticulture growing areas and showed its reservations about the quality of crops.

It also set conditions for exporters to get their products certified from a certain private laboratory in Lahore before exporting them to Russia, apart from the routine phytosanitary certification from the Department of Plant Protection (DPP).

Exporters were hardly satisfied with the decision at the time since the prescribed lab was neither registered with the DPP, nor did the DPP have any credentials for this lab.

FPCCI officials state that lack of understanding on quarantine controls between Russia and Pakistan is the main reason behind incidents like these.

Jawad said the latest problem between the two countries relates to the valuation of import duty on Pakistani kinnow and potatoes by Russia Customs, which is ‘unfair and biased’.

Exporters believe that if the valuation issue is quickly resolved, there can be an immense increase in exports.

Citing an instance, he says in 2015 the import duty imposed by Russia Customs on Pakistani potatoes was 61 cents per kg. On Egyptian potatoes, however, the duty was 48 cents, 13 cents lower than Pakistan’s.

“The fair cost-and-freight (C&F) value of Pakistani potatoes was 36 cents per kg,” he contented.

The problem arises because Pakistani kinnow is being compared with that of Spain and Morocco, which are highly priced due to their seedless and aesthetic qualities.

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“Their kinnows are available at $10-19 per 10 kg while Pakistani kinnow is sold at $6.5-7.5 per 10 kg. The issue of unfair valuation is a matter of great concern for Pakistani traders as the export potential of these two products to the Russian market cannot be fully exploited,” he added.

Jawad said he had raised the issue with Russian Ambassador to Pakistan Dr Alexander G Khozin in a recent meeting, with the latter giving assurances of reviewing the matter in detail.

“His (the ambassador’s) major demand was to open banking channels between the two countries, which he believed could boost trade to $1 billion,” Jawad added.

Published in The Express Tribune, August 12th, 2017.

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