KARACHI: The Iranian government has refused to renew import permits for Pakistani citrus and raised customs duty manifold making kinno export to Tehran unviable.

“It is an indirect ban on import of kinno from Pakistan. There is demand in Iran for Pakistani kinno and the change in policy would encourage illegal border trade between the two countries”, a source in the commerce ministry told Dawn on Saturday.

The citrus exporters were perplexed at the Iranian government’s steps despite the existence of the Preferential Trade Agreement (PTA) between the two neighbouring countries.

Some exporters said one reason behind the move may be balance of payments difficulties being faced by Iran after the imposition of sanctions by Western nations.

But officially there was no confirmation of such a development but officials in the ministry of commerce confided that the issue had already been taken up with the Iranian government.

However, the official sources said that the Iranian government did not inform Pakistan about the changes in duty regime.

During a recent inter-ministerial meeting held in Islamabad and chaired Additional Secretary Commerce Fazal Abbas Maken took stock of the problem of export of kinno to Iran, Central Asia, Afghanistan and Indonesia.

The chairman of the Citrus Growers Association of Pakistan informed the inter-ministerial meeting that Iranian government had imposed ban on import of fresh fruit including kinno from Pakistan.

He also informed that Iran had increased customs duty to 90 per cent from 45 per cent on import of kinno from Pakistan, which is encouraging smuggling of the fruit.

However, insiders told Dawn that the Iranian ministry of agriculture had proposed to impose ban on import of citrus from Pakistan but the Iranian government stopped short of imposing a ban but increased the customs duty. The representative of Trade Development Authority of Pakistan (TDAP) informed the meeting that legal trade between Iran and Pakistan of horticulture products was officially restricted for the last one month.

However the meeting was also informed that since kinno was included in the list of concessions under the PTA the Iranian government cannot legally increase tariffs on the fruit.

It was suggested that the State Bank of Pakistan (SBP) should workout arrangements for transfer of payments and even explore the possibility of negotiating a currency swap mechanism with Iran.

All Pakistan Fruits and Vegetables Exporters and Importers Merchants Association Senior-Vice Chairman Chaudhary Nisar Amjad told Dawn that exporters were confronting a number of problems in promoting exports through official channels.

He said that Pakistan exported 70,000 to 80,000 tons of kinno to Iran last season, but the sharp hike in customs duty had almost stopped citrus export through official channels, causing revenue loss to both the countries as larger quantities were being smuggled.

Amjad further said that lack of proper logistics was the biggest problem in boosting exports of fruit and vegetables resultantly Pakistani farm produces were fetching low prices.

He explained that high freight charges were making exports unviable to Central Asian Republics (CARs) as after the haulage of perishable goods up to Pak-Afghan border at Chaman the exporters had to engage other vehicles for onward journey of five to six days to reach border areas of CARs.

He lamented that many exporters did not put entire consignments of kinno under mandatory chilling and upon getting certifications mix larger quantities of non-chilled kinno to save time and cost, which is earning bad name to the country.