Fruits and vegetables: Time to top Russia’s lucrative market

Exporters want govt to take measures to improve trade volume

Farhan Zaheer December 28, 2014

KARACHI: The government has done very little to improve trade relations with Russia, which is adversely affecting the export of fresh food, according to Pakistani fruit and vegetable exporters.

They claimed Russia can become one of the most important markets after its ban on various European Union’s (EU) food products and, despite the recent economic slowdown in Russia, a huge quantity of oranges and potatoes can be exported.

The recent warmth in bilateral relations of the two countries has done little to improve the trade volume.

“We want the government of Pakistan to engage Russian authorities on different platforms so that the country can increase its fruit and vegetable exports,” said Aslam Pakhali, a Karachi-based leading exporter of potatoes.

Few days ago, the Economic Coordination Committee (ECC) of the cabinet abolished 25% regulatory duty on export of potatoes on higher domestic production. The government allowed imports and placed regulatory duty on the exports of potatoes in May after its prices jumped significantly.

The ECC took the decision on the recommendation of the Ministry of National Food Security and Research. The meeting was informed that farmers had planted the crop on 10% larger area and the country will have surplus potato output this year.

In absence of any scientific mechanism, one can doubt the estimates of the concerned ministry. However, the domestic prices of potatoes right now have come back to their normal range of Rs35-40 per kg from as high as Rs90 per kg a few months ago.

The exporters of potatoes are gearing up for exports but they are extra cautious about the Russian markets, Pakhali informed. “Exporters are extra cautious this season because a lot of transactions of the recent orange exports to Russia are yet to materialise. The business in Russia is slow and uncertain in recent months owing to international sanctions and sharp ruble fluctuation against the dollar,” he added.

Exporters say that recently Russia has lifted the import duty from Indian potatoes mainly because of better trade relations between the two countries and this may create further problems for them in the ongoing season. Pakistan lacks proper banking channels and sufficient trade lobbying in Russia.

The exporters of potatoes are first making deals with Sri Lanka while Middle East and Far Eastern markets will come in the next phase, he informed.

The expected crop this year is 3 million tons out of which only about 0.1 million tons of potatoes may be exported. The expected proceeds from potatoes export may reach $30 million, according to estimates.

India has a better per-acre yield while Bangladeshi exporters get rebate on their exports.

Due to the imposition of regulatory duty, Pakistani exporters say many of their markets were taken over by Indian and Bangladeshi exporters. Therefore, they may have to face additional challenges this season.


Published in The Express Tribune, December 29th,  2014.

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