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Sri Lankan move hampers exports

Published: November 24, 2011

KARACHI, Nov 24: The Sri Lankan decision of imposing a special commodity levy on imports of fruit and vegetables from many countries including Pakistan has annoyed local exporters at a time when citrus export season gets underway.

Under the Free Trade Agreement (FTA) between Pakistan and Sri Lanka there was no duty on import of fruits and vegetables and Sri Lankan importers were only required to pay a cess.

All Pakistan Fruits Vegetable Importers Exporters and Merchants Association Co-Chairman Waheed Ahmed said that after the new levy many Sri Lankan buyers of Pakistani kinno, onion and potato were suspending their orders as they would now have to pay $4.47 per kg on kinno import as against the $2.19 per kg cess.

Similarly, on import of onion and potato they would have to pay 22 cents and 30 cents per kg from nine and 4.5 cents per kg, respectively.

He said 13,000 tons of kinno were exported to Sri Lankain thelastseason outoftotal exports of 215,000.
Pakistan produces around two million tons of the fruit and the overall export target for this season has been fixed at 300,000 tons.

`Our export of kinno to Sri Lanka is likely to fall by 60-70 per cent after the new levy, he said, adding that some 260 tons of kinno has already been shipped on which the Sri Lankan buyers will have to pay special commodity levy.

Kinno export season begins from November 15 and end by mid April.

The potato exports will resume from January February and the share of Sri Lanka is estimated at 35,000 tons or 30-35 per cent out of country`s total potato export.

Pakistan exports 22,000 tons of onion to Sri Lanka, which accounts for 25 per cent of the country`s onion exports. Waheed said that the association had asked the Trade Development Authority of Pakistan (TDAP) to take up the matter with the Sri Lankan government. `The local exporters will also discuss this issue with Sri Lankan Consul General in a meeting on Friday, ` he added.

A vegetable dealer at Subzi Mandi Super Highway said export of onion had already been suspended as Pakistan was importing onion from India and Iran to bridge the demand and supply gap caused by 70-80 per cent crop devastation in Sindh due to recent floods and rains.

`A sizable quantity of Indian onion has arrived in the last one and a half months by sea route,` he said.
He said arrivals from the new crop of Sindh pushed down the prices to Rs15-20 per kg causing heavy losses to many traders who had imported Indian onion at higher rates.