The Afghan government has increased the customs duty on kinnow imports starting from November 27, causing a ripple effect among exporters and local farmers.
Exporters are now contending with a hefty charge of Rs. 2.9 million per 35-ton container, marking a sharp 43.5 percent surge from the previous year’s rate, reported a national daily.
This development coincides with the commencement of the fruit harvesting season, adding to the concerns of those involved in the trade.
Sargodha Chamber of Commerce and Industry President Sajid Hussain Tarar said the escalated customs duty not only impacts kinnow exports but is also poised to significantly lower fruit prices in the local market due to a potential decline in exports.
Sargodha, along with its adjacent districts, is recognized for producing supreme-quality citrus fruit.
Tarar further revealed that Afghanistan, a crucial market for Pakistani kinnow, has been consistently taking measures against the import of this citrus fruit.
Concerned by the recent spike in customs duty, Tarar has reached out to the federal government and the commerce minister, urging them to address the issue with the Kabul government for a more ‘rationalized’ tax structure, providing relief to exporters.
He emphasized that achieving the export target would be nearly impossible if corrective measures are not taken promptly, given that the Afghan market consumes almost half of the total Pakistani kinnow exports.
Highlighting a similar situation from the past, former SCCI president Shoaib Ahmad Basra recalled that Kabul had increased tax rates last year but subsequently reduced them by 60% following Islamabad’s intervention.
Expressing apprehension, Basra warned that failure to resolve the customs duty issue might lead to a drastic reduction in kinnow prices in the local market, potentially falling below Rs. 1,000 per 40kg.
This downturn would prove devastating for kinnow orchard owners, particularly in the face of challenges such as whitefly attacks in certain kinnow zones.
The Kabul government’s decision to immediately increase the duty from Rs. 2.02 million to Rs. 2.9 million follows last year’s tax hike from Rs. 0.53 million to Rs. 2.02 million.