07 March 2005	Monday	25 Muharram 1426

LAHORE, March 6: A kinoo crisis brewing between Pakistan and Indonesia may cost the former around $16 million -- 40 per cent of its export target of $40 million for this year.

The Indonesian government has recently made a five-time increase in duty on all mandarins, a type of citrus fruit, from all countries. But a Free Trade Agreement between China and Indonesia gives Chinese mandarin an edge of 25 per cent over all other kinoo exporting countries because its fruit is now taxed at zero per cent.

Pakistan, being one of the largest exporters of the fruit, is first to feel the heat as it faces 40 per cent drop in its citrus export to Indonesia. Even export in the pipeline cannot be delivered now and many of ships from Pakistan are stranded on high seas. Pakistani exporters have received no export order since Feb 1 last.

Frustrated by the situation, the kinoo exporters are asking the government to reciprocate the move by increasing five-time duty on all Indonesian imports to Pakistan. Otherwise, they say, they will hold a peaceful demonstration in front of the Indonesian Consulate in Karachi.

In a recent letter to Federal Commerce Minister Humayun Akhtar Khan, Pakistan Citrus Fruits and Persimmons Processing Association suggested that a five-time increase should immediately be imposed on Indonesian products being imported to Pakistan.

The letter claimed that the association had failed to convince the Indonesian trade and industry ministry to withdraw duty increase and bring it back to five per cent. Citing an example of the recent row with Kenya after it increased duty on Pakistani rice and the latter resorting to enhancing duty on Kenyan tea, the letter suggested a tit-for-tat action.

"The trade balance between Pakistan and Indonesia has always favoured the latter. Hence the increase of duty on Pakistan's fruit is an unfair decision by Indonesian government.

If the government increases duty on Indonesian imports, it will leave very little room for the latter to persist with the new duty structure," the letter read.

Exporters from Lahore also claimed that Indonesian government increased duty on mandarin, but Pakistani kinoo was also included in this category. It would be possible to convince the Indonesian authorities that kinoo was a different kind of citrus and should be categorized separately.

Unfortunately, they said, the government was still to react to the situation and letting exporters suffer. The exporters also threatened to hold a demonstration in front of the Indonesian Consulate in Karachi, but the government stopped them fearing a diplomatic row.

They said the association wrote a letter to the consul general revealing their demonstration plan. "The nature of the letter is intimidatory towards a representative of a foreign government and can hardly be accepted. There are certainly avenues to solve problems and sometimes it takes time. Indonesia and Pakistan have a strong foundation of relationship."