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October 17, 2019

Kinnow exports in limbo on price fixing dispute

Business

October 17, 2019

KARACHI: Fruit exporters have rejected the fixed price of kinnow at Rs1,000/40kg and demanded the government to revoke the decision taken by the deputy commissioner of Sargodha in a meeting held with growers.

In this regard, Pakistan Fruits and Vegetables, Importers, Exporters and Merchants Association (PFVA) wrote a letter to Prime Minister’s Advisor on Commerce, Textile and Industry, Abdul Razzaq Dawood on Wednesday.

The PFVA slammed the decision of Deputy Commissioner Sargodha Aseya Gul to fix kinnow price at Rs1,000/40kg as illegitimate in nature. It said that the decision was beyond the legal office jurisdiction and hence it should be declared null and void.

“It’s astonishing that the association being a main stakeholder was not involved in this consultative meeting,” PFVA Secretary General Mohammad Ilyas Khan said in the letter.

“Certain influential people of Sargodha having their own financial interest got this rate fixed up without giving even the slightest thought to the poor exporters, who are likely to become victim of this high rate of kinnow later,” claimed the PFVA.

The cost of exporting kinnow was already relatively high compared to other competitors exporting to the big international market of Russia. This upward revision of cost of kinnow would further deepen this issue leaving aside the quality factor which remains equally concerning, the letter said.

The association said that owning to currency depreciation and an increase in the freight charges and service cost, they were unable to bear the higher price fixed by the DC office. “The cost of corrugated box, which is imported for packaging, has also multiplied due to exchange rate, adding further to cost factor,” the letter added.

Recent implementation of load axle regime (weight limitation for trucks) by the government has resulted in financial losses to the exporters and thus further added to the cost factor as well.

Ilyas Khan said the main buyer of kinnow was Russia, but with stiff competition from Egypt, Morocco, Turkey and China due to availability of several varieties and better quality, the decision made the Pakistani variety of kinnows uncompetitive in the international market.

“The illegitimate decision to enhance rate of kinnow for the next season will lead to closure of numerous processing units in district Sargodha, while around 30,000 workers directly or indirectly associated with the processing units will become jobless.”

Former chairman of the FPCCI Standing Committee on Horticulture Exports and the Businessmen Panel Secretary General (Federal), Ch Ahmad Jawad said that last year, kinnow was purchased for Rs850/40kg while exporters had fixed Rs600 this year, which was unjustifiable as the prices of DAP, potash and urea have gone up compared with last year, including the price of diesel that reached Rs133/litre.

“In the previous government’s tenure, urea and DAP prices were Rs1,200 and Rs2,380 per bag respectively, and during the incumbent government, urea and DAP prices are Rs1,925 and Rs3,395 per bag respectively and the price of potash is Rs4,200,” Jawad said.

He added there was mistrust between exporters and growers on the ground. The growers felt that exporters cut their share and export product on good rates but they do not show them figures of their volumes and international price rate.

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