Unfair valuation hurting exports of kinnow, potato to Russia

Published: September 23, 2016

Unfair valuation of Pakistani kinnow and potato by the Russian Customs' authorities is hurting exports of these two items. Exporters told Business recorder on Thursday that fair export Cost and Freight (C&F) value of Pakistani Kinnow is 75 cents per kilogram whereas the Russian custom fixed much higher valuation than the fair value. Valuation by Russian Customs has been fixed at 90 cents per kg during December 2015 to January 2016 and $1.05 per kg from February onward, they informed.

While, the valuation is higher for Pakistani kinnow, exporters have to sell at a cheaper price due to low cost of production in the market, which we consider as an "unfair trade practice" by the Russian customs' authorities. Besides higher valuation, the duty is 8.75% and VAT is 18 percent.

The Russian customs authorities valuates Pakistani kinnow comparing it with kinnow of Spain and Morocco which are highly priced since it's seedless and gives impressive cosmetic look contrary to Pakistani kinnow, which is neither seedless nor gives a better cosmetic look and its selling price in the Russian market is quite low. It worth quoting here that Moroccan and Spanish kinnow are available at $10 to $19 per 10 kg whereas Pakistani kinnow is sold at $6.5 to 7.5 per 10 kg. "The issue of unfair valuation of Pakistani kinnow and potato is of great significance since tremendous export potential of these two products to the Russian market cannot be fully exploited and thus necessitates immediate action to get the issue resolved," said Waheed Ahmed, chairman All Pakistan Fruit & Vegetable Exporters, Importers & Merchants Association (PFVA).

In a letter sent to Federal Finance Minister Senator Ishaq Dar, he urged government to take immediate steps to resolve this critical issue as kinnow exports season was coming. This impending issue, if promptly resolved, will play a significant role in enhancement of export of kinnow and potato to Russia, he said.

Chairman PFVA requested the finance minister for use of influence of office to get the issue resolved by an interaction with the concerned Ministry in Russia. He informed that during the last season of potato, the import duty imposed by the Russian government on Pakistani potato was 61 cents per kg while it was 48 cents per kg on import of Egyptian potato. The fair export C&F value of Pakistani potato was 36 cents per kg during the last season.

Waheed said that the kinnow season is approaching fast and therefore the issue assumes prime importance. He said that the issue of valuation will be discussed in the next meeting of Inter-Governmental commission, scheduled to be held in Moscow this year and it's strongly recommend to have a representative of the PFVA in this meeting so that the issue could be highlighted with logical argument in a professional manner.