EXPORT POTENTIAL OF PAKISTANI MANGOES
...eriod preceding to it. Out of a total of $2.4 million exports of mangoes to the European countries, 69.6% was shipped to UK, followed by 6.9% to Germany and 4.6% to Netherland during the financial year 2000-2001. Given a sizeable immigrant population of Pakistani origin in UK, this expansion in the demand of mangoes is expected to sustain in the short run and later flatten after a period of 3 to 5 years in the future. Middle Eastern markets have dominated the overall exports and hence foreign exchange earnings. A closer view of the direction of trade data reveals interesting phenomena. The overall unit fob (Free on Board) price of mangoes had been stagnant during the first 03 years of the 5 years period (1996-2001) under analysis. There has been sharp increase in the fob unit price during the last 02 years (1999-2001), which can be viewed as favorable from the point of view of foreign exchange earnings for the country. However, a further regional comparison of the fob unit export price of mangoes reveals interesting view of the direction of trade. Europe, Singapore and USA can be viewed as a premium market for Pakistani exporters. Exports to these countries fetched higher unit prices when compared with those of Middle Eastern markets. Unit export price of mangoes to Singapore during the financial year 2000-2001 reflects a 29% premium compared with the overall average price of 31 cents/kilogram, followed by 22.6% premium for US markets and 16.1% premium for European markets for Pakistani mangoes. Direction of export trade of mangoes from Pakistan reveals interesting phenomenon during 1996-1999. Unit fob export price of Pakistani mangoes in the US and European markets had been steadily declining (an average of 17.35%) over this period. It declined from 49 cents/kilogram during the financial year 1996-1997 to 32 cents/kilogram during 1998-99. Unit fob price of mangoes recovered from this low of 32 cents/kilogram to 36 cents/kilogram. Fortunately, this phenomenon was reversed during the recent past. A comparison of the average export prices reveals an interesting phenomenon. Average price fetched by mangoes in the world markets during the year 2000 was 87 cents/Kg (computed by dividing the Total world mangoes exports ($ value) by the total world mangoes exports quantity in Kg.). A similar analysis of the exports of the competitors yields to the fact that Pakistani mango fetched the lowest price of 32 cents/Kg compared with Indian average of 41 cents/Kg, Brazilian 53 cents/Kg, Mexican 54 cents/Kg, Philippino 99 cents/Kg and Peruvian 111 cents/Kg being the highest. Part and not all of it can be explained in terms of the premium market, North American demand and nearness and similarity of tastes, preferences and differences of the trade barriers. Another interesting phenomenon is observed by a similar exercise on the international import trade statistics of the important players in the market. Japanese average import price was highest throughout the last decade. Mango in Japan was imported at $2.85/Kg followed by Western Europe at $1.14/Kg., Hong Kong at $1.03/Kg, Kuwait at $0.85, Singapore at $0.78, Saudi Arabia $0.71/Kg, and UAE at $0.48/Kg in the year 2000. Further, following the direction of exports of Pakistani mangoes, it can be said that, the exporters have failed to target high-end market, and dumped the precious commodity in the low price markets. Air transport freight is an inhibiting factor for the export of mangoes from Pakistan. Typically airfreight from Karachi to London is Rs.85/Kg, about 70% of the CFR value (when compared with the average farm value of Rs.25/Kg) leaving very little room for the exporter to negotiate with the buyer or making profits. It is, therefore, proposed that the exporters and farmers may be encouraged through the provision of incentives to engage in the activity of export by sea using Reefer containers. Savings from the freight expenses can be used by the exporter to provide room for negotiation with the buyer, grower of the commodity, and contribute to the investment in processing, handling and inland transport stage. The need for private/public sector investment for establishment of cold storage facilities either at the airports or seaports can be minimized. In case of export by sea, the cargo will be exported in the reefer containers as FCL (Full container load), thereby eliminating the need for investment in the cold warehouses at seaports on a large scale. This mode of transport will result in saving of about Rs.50/Kg in respect of the shipments destined for Europe, e.g. U.K. Public Policy Alternatives: It has been evaluated by a research study that the exports of mangoes from Pakistan have a potential of at least ten folds compared to the current level once the cold chain is established in the country and post harvest techniques are put into place for extension of shelf life of the produce. These investments and policy incentives will be useful for value addition through improvements in the quality of the harvest. The value addition and improvement of quality can in turn help in tapping the true potential of high-end markets like Japan, Far East and Western Europe. Increase in exports through the use of reefers transport by sea will also increase the per capita income of the country and help in improvement of quality of life of the poor population living in the countryside. Pakistan is faced with problems, internal weaknesses and threats from competitors like India and China. Government of Pakistan has several options available to it for capitalizing on the opportunities available in the international market. It can let the free market mechanism to take its course in the domestic as well as international market, intervene in the domestic markets to correct the market failure, provide freight subsidy to the exporters sending mangoes by air, invest heavily in the cold chain infrastructure in the country, launch massive literacy program for players of the supply chain for changing their attitude towards the living commodities like mangoes for improvement of the handling, transportation and storage, launch aggressive national marketing strategies like 3V (Value, Volume and Variety) proposed by an earlier research study (SMEDA 2000), create incentive system for the private sector for establishment of the cold chain infrastructure, purchase all mango produce and export it through a public sector export organization like Rice Export Corporation of Pakistan, introduce stringent packing, processing and quality requirements for export of mangoes, invest in and encourage the establishment of fruit canning, bottling, pickling and packaging industries etc. One or more of these options can be adopted and implemented by the policy makers keeping in the view the scarcity of resources, social costs and social benefits arising out of the policy package. With these points in mind, benefits of cold chain infrastructure on the exports and quality of life of the domestic population, potential of Pakistani mango exports, its current position in the international market and future prospects, you have to ponder to arrive at answers for the public policy questions suitable for the country aimed at capturing the expanding international market of mangoes (For details see Appendix). References: 1. Raja, M.B. and Khokhar, K.M., 1993 “Postharvest Horticulture Technology and its Future Prospects (pp-265-277), Proceedings of First Horticulture Seminar, 09-11 January 1992, Pakistan Agricultural Research Council, Islamabad. 2. Iqbal, M. 1996 “Type and Extent of Postharvest Losses in Horticultural Commodities in Pakistan (pp: 33-42) Proceedings of National Conference on Postharvest Technology of Horticultural Commodities, 10-12 September, 1996, Quetta. 3. Jalil, Hamid Dr., “Problems of Urban Food Security”, Daily Dawn 8th April 2002. Newspapers: 4. “Processed Mangoes Exported to Far East, UK, Gulf”, Daily Business Recorder, 31st July 2002. 5. “Multan: Karachi: 12 pc Increase in Mango Export”, Daily Dawn 5th October 2001. Government: 6. Export Promotion Bureau (EPB), Ministry of Commerce, Government of Pakistan, Karachi. (Direction of Trade Data obtained from Statistics Department of EPB in the year 2002) 7. Federal Bureau of Statistics (FBS), Statistics Division, Government of Pakistan, “Pakistan Statistical Year Book 2002. 8. Small and Medium Enterprise Development Authority (SMEDA), “Hexpo 2000 and Beyond”, November 2000. International Organizations: 9. FAOSTAT 2001, Dataset of Food and Agriculture Organization (FAO), United Nations. APPENDIX: Table 01: Area under Mango Cultivation in Pakistan (000 Hectares) Year Punjab Sindh NWFP Baluchistan Total 1991-92 47.5 37.2 0.2 1.1 86 1992-93 44.7 37.4 0.2 1.3 83.6 1993-94 45.3 37.8 0.2 1.5 84.8 1994-95 47.8 38.7 0.2 1.6 88.3 1995-96 48 39.5 0.2 1.8 89.5 1996-97 48.1 40.3 0.2 1.8 90.4 1997-98 48.2 42.5 0.2 1.9 92.8 1998-99 48.4 42.9 0.2 2 93.5 1999-00 48.4 43.5 0.2 2 94.1 00-01 49.5 45 0.2 2.3 97 Average 47.59 40.48 0.2 1.73 90 Source: Pakistan Statistical Year Book 2002, Federal Bureau ofStatistics, Statistics Division, Government of Pakistan March 2002 Table 02: Mango Production and Exports from Pakistan (000 Metric Tonnes) Year Punjab Sindh NWFP Baluchistan Total 1991-92 507.6 269.2 1.9 8.5 787.2 1992-93 510.1 270.9 2 10.7 793.7 1993-94 550.2 274.4 2 12.7 839.3 1994-95 581.4 285.3 2.1 14.9 883.7 1995-96 598.8 291.7 2.2 15.1 907.8 1996-97 602.4 293.5 2.2 16.4 914.5 1997-98 586.2 311.9 2.3 16.4 916.8 1998-99 582.8 314.6 2.3 16.6 916.3 1999-00 603.8 320.7 2.3 10.9 937.7 00-01 634.9 340.3 2.3 12.3 989.8 Average 594.8 306.48 2.26 15.08 918.62 Source: Pakistan Statistical Year Book 2002, Federal Bureau of Statistics, Statistics Division, Government of Pakistan March 2002 Table 03: Mango Productivity in Pakistan (MT/Hectares) Year Punjab Sindh NWFP Baluchistan Total 1991-92 10.7 7.2 9.5 7.7 9.2 1992-93 11.4 7.2 10. 8.2 9.5 1993-94 12.1 7.3 10. 8.5 9.9 1994-95 12.2 7.4 10.5 9.3 10. 1995-96 12.5 7.4 11. 8.4 10.1 1996-97 12.5 7.3 11. 9.1 10.1 1997-98 12.2 7.3 11.5 8.6 9.9 1998-99 12. 7.3 11.5 8.3 9.8 1999-00 12.5 7.4 11.5 5.5 10. 00-01 12.8 7.6 11.5 5.3 10.2 Table 04: Mangoes Exports S# Description 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 %age of World Trade Weight/ Value 1 Mangoes Exports - World (Qty MT) 211,584 218,125 255,317 298,714 350,611 394,861 432,948 468,812 539,807 566,521 2 Mangoes Exports - World (Value 000$) 233,771 262,152 278,111 325,908 404,535 389,628 419,137 443,325 471,525 491,310 3 Average World Price of Mangoes ($/Kg) 1.1 1.2 1.09 1.09 1.15 0.99 0.97 0.95 0.87 0.87 4 Mangoes Exports - Pakistan (Qty MT) 10,585 17,716 18,811 14,830 16,628 18,361 25,058 40,251 37,971 48,453 8.6% 5 Mangoes Exports - Pakistan (Value 000$) 3,003 4,467 4,320 2,914 3,208 4,124 5,784 6,377 7,519 15,558 3.2% 6 Average World Price of Pakistani Mangoes ($/Kg) 0.28 0.25 0.23 0.2 0.19 0.22 0.23 0.16 0.2 0.32 7 Mangoes Exports - India (Qty) 23,105 25,850 23,405 27,320 23,275 26,780 44,862 47,149 37,822 37,110 6.6% 8 Mangoes Exports - India (Value 000$) 14,539 17,476 14,705 15,141 12,353 13,402 20,588 20,004 18,023 15,278 3.1% 9 Average World Price of Indian Mangoes ($/Kg) 0.63 0.68 0.63 0.55 0.53 0.5 0.46 0.42 0.48 0.41 10 Mangoes Exports - Brazil (Qty. MT) 7,618 9,078 18,203 13,181 12,828 24,186 23,370 39,186 53,765 67,172 11.9% 11 Mangoes Exports - Brazil (Value 000$) 4,746 6,905 19,837 17,505 22,136 28,741 20,182 32,517 32,011 35,764 7.3% 12 Average World Price of Brazilian Mangoes ($/Kg) 0.62 0.76 1.09 1.33 1.73 1.19 0.86 0.83 0.6 0.53 13 Mangoes Exports - Mexico (Qty. MT) 99,767 78,028 110,789 125,775 131,721 164,903 187,127 209,426 204,002 206,782 36.5% 14 Mangoes Exports - Mexico (Value 000$) 89,054 84,858 110,039 104,049 104,793 137,056 127,576 143,539 123,284 111,126 22.6% 15 Average World Price of Mexican Mangoes ($/Kg) 0.89 1.09 0.99 0.83 0.8 0.83 0.68 0.69 0.6 0.54 16 Mangoes Exports - Peru (Qty. MT) 1801 6574 4834 7336 7571 12168 9449 10541 20026 21070 3.7% 17 Mangoes Exports - Peru (Value 000$) 1,670 7,680 5,410 7,320 6,930 11,770 10,100 11,827 23,419 23,305 4.7% 18 Average World Price of Peruvian Mangoes ($/Kg) 0.93 1.17 1.12 1. 0.92 0.97 1.07 1.12 1.17 1.11 19 Mangoes Exports - Phillipines (Qty. MT) 22,426 27,124 30,302 29,065 43,937 40,252 44,939 52,579 35,102 40,031 7.1% 20 Mangoes Exports - Phillipines (Value 000$) 24,377 28,669 26,631 29,523 43,234 39,761 40,479 45,992 32,340 39,812 8.1% 21 Average World Price of Phillipino Mangoes ($/Kg) 1.09 1.06 0.88 1.02 0.98 0.99 0.9 0.87 0.92 0.99 22 Mangoes Exports - Rest of the World (Qty.MT) 46,282 53,755 48,973 81,207 114,651 108,211 98,143 69,680 151,119 145,903 25.8% 23 Mangoes Exports - Rest of the World (Value 000$) 96,382 112,097 97,169 149,456 211,881 154,774 194,428 183,069 234,929 250,467 51.0% 24 Average Price of goes Exports - Rest of the World ($/Kg) 2.08 2.09 1.98 1.84 1.85 1.43 1.98 2.63 1.55 1.72 Source: FAOSTAT 2001, Food and Agriculture Organization Table 05:World Mango Market S# Description 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 1 Mango Imports of United States (Qty. MT) 92,345 76,380 110,...