Exporting citrus fruits to developed markets
Among all fruits, area under citrus, its production and exports are at the top. About 95 per cent of the citrus area is located in Punjab. The total area under fruits is 0.65 million hectares with a total production and export of 5.7 million metric tones and Rs6.4 billion respectively.
Of the total area under fruits, 29.55 per cent is under citrus and 60 per cent of it is under kinnow with more than 75 per cent production of total citrus fruits. Under citrus fruits, kinnow area, production and exports are at the top. More than 90 per cent of citrus exports are those of kinnow. Pakistan is among the top ten kinnow (hybrid mandarin) producing and exporting countries.
Our production capacity is 1.28 million tons per season. There are about 28 kinnow processing plants with a processing capacity each of 5-10 metric tons per hour, located at Sargodha and Karachi.
Citrus also significantly contributes to employment generation through various activities from production to harvesting and domestic and international marketing. Assuming that all kinnow produced in Punjab is domestically marketed, the employment generated from its production and marketing is estimated at about 23.48 million labour days or fulltime jobs for more than 75,000 people (about 57 million labour days in production and remaining in marketing sectors).
Kinnow is a hybrid of two citrus cultivars; “King” and “Willow Leaf” and is classified as kinnow mandarin. It was introduced from California to the Punjab Agricultural College and Research Institute, Lyallpur (now University of Agriculture, Faisalabad) in the sub-continent in 1943-44. This “easy peal” citrus has assumed special economic importance and export demand being acknowledged for its high juice content, special flavour, delicious taste and as a rich source of vitamin-C.
In per capita terms, the annual availability of citrus is nearly 12.5 kg of which kinnow makes up about eight kg. A consumption of eight kg per capita implies the availability of 1,206 milligrams of vitamin-C, 1520 milligrams of calcium, 684 milligrams of phosphorous and nearly 16 milligrams of iron, per head during the citrus production season. In the citrus production season, kinnow consumption can make a significant contribution to improve human diet in terms of total micronutrients intake.
Most of the target export markets of kinnow are developing countries. Only 2.6 per cent of kinnow exports target developed markets, which is due to the emerging demand for seedless variety by the developed countries. About 61 per cent of total world exports of oranges and mandarins are of seedless varieties. Unfortunately, Pakistan is not producing seedless kinnow, due to which its target markets are limited and mostly confined to the Middle East countries. Some important export markers of kinnow are: Bahrain, Dubai, Kuwait, Oman, Qatar, Saudi Arabia, Indonesia, Malaysia, Afghanistan, Netherlands, Philippines, Singapore, UK and Vietnam.
There is a great need to concentrate in the area of technological improvement like tissue culture technique and genetic engineering, to enhance the production of seedless kinnow. . Furthermore, our production and export of the fruit have been increased overtime only due to increase in acreage and not due to improvement in technology. Therefore, we should also develop high-yielding and disease-resistant varieties through technological improvement.
Domestically, the use of expensive refrigerated transport facilities is limited. Costly packing material of good quality and other inputs are needed in citrus processing, and credit is required on easy terms and conditions. All these limitations result in the increased cost of production and also adversely affect quality.
The inability of citrus fruit to compete in the expensive markets is due to non-availability of infrastructure like hi-tech labs for issuing various certificates for health and environmental safety. It is also due to divergent paths of our citrus with the tastes and preferences of high-price markets. All these factors result in confining our exports to cheaper markets.
Marketing practices lack the requirement of agreement on application of Sanitary and Phytosanitary (SPS) measures of WTO. Kinnows were rejected by importers in the past because they were packed in wooden boxes, prohibited under SPS, as they may carry pathogen (pests) across the border.
Some complaints of pesticide residue are also reported. The SPS agreement is a threat for developing countries because they so far do not have enough modern technology to meet SPS requirements fully. They also do not possess enough resources to import these technologies.
Increasing exports of farm products and simultaneously minimising the import of agricultural-based products are key objectives of agricultural policy. The WTO has placed numerous challenges as well as created opportunities for agricultural exports. In the international trade arena, the issues of marketing with established quality and standards have become more pronounced and complicated.
Pakistan must prepare itself to make progress in all sub-sectors in order to compete internationally. Hence, urgent efforts are needed to improve international competitiveness by introducing cost effective production technologies. The WTO regulations can become an opportunity for the citrus exporters, provided they prepare themselves to comply with the specifications needed. The policy support from the government is also equally important in this respect.
It is suggested that in Sargodha, citrus exports zone may be set up where all necessary facilities like cold stores, refrigerated transport, financial institution, SPS certifying laboratories, marketing information analysis department, etc. are available.
The resource cost ratio (RCR) analysis revealed that kinnow producers of the study area (Sargodha district) are economically efficient. This means that with the freeing up of trade and removing distortions in the domestics markets, effective incentives for citrus cultivation would substantially increase.
We have a comparative advantage in terms of kinnow prices. Our kinnow export price is less than the average international mandarin price and lower than that in major mandarin exporting countries. According to some FAO studies, it is expected that prices of fruits and vegetables would rise in future, creating incentive for kinnow producers to grow and to raise its exports.
The need of the hour is that we should adopt new technology to meet international requirements. We should produce seedless citrus varieties; adopt scientific techniques to perform various marketing activities and to reduce post harvest losses.