Food exports growth in FY13, flattened in the very next year owing to a host of reasons, has raised the question of sustainability in its growth trend.

In FY13, overall food exports had grown by 11.35pc to $4.732bn. But in 11 months of FY14, food exports fetched $4.296bn, down 1.4pc from $4.375bn in a year ago period. TDAP officials say the full fiscal year exports are sure to touch the last year’s mark but look hard to surpass it.

Interestingly, the total food exports had increased in FY13 despite a decrease in rice exports, the biggest food export item. But in the last fiscal year, rice exports bounced back, showing a handsome gain of 14.5pc to $2bn in 11 months of the year, latest official stats reveal.

One-time jump in exports of some food items is often not sustained because ‘our people and institutions don’t mend their ways,’ as an official of Engro Foods put it.

Unlike rice and seafood that have been on the list of our key food exports, earnings from exports of wheat and sugar vary from year to year, depending upon the actual trade surpluses of the two commodities

For example, a $2m vapour heat treatment plant imported from Japan in August 2013 is still lying dumped at Karachi expo centre, according to a recent Dawn report. This plant could have enhanced food exports had it been put to use on time.

In 11 months of FY14, however, fruit exports grew by 8.6pc to $389m).

It’s not just such lapses that decelerate exports growth of one food item or the other. Delayed or lack of policy responses, too, keep growth potential from being exploited fully.

Sugar exporters lament that delayed announcement of export policy, twice in FY14, and unrealistic official assessment of surplus stock contained sugar exports below 0.6m tonnes. This fetched only $256m, far lower than the year-ago exports of $475m.

Unlike rice and seafood that have been on the list of our key food exports, earnings from export of wheat and sugar varies from year to year, depending upon the actual trade surplus of the two commodities. “So, one aspect of sustainability in food exports is related to ensuring outputs higher than domestically-required wheat and sugarcane. Another, equally important aspect is about smuggling,” says an official of the Ministry of National Food Security and Research. “Smuggling of wheat and wheat flour to Afghanistan in the last fiscal year was rampant. Short wheat crop in Kazakhstan and low production in Afghanistan promoted smuggling from Pakistan and Iran into Afghan markets.”

Some food items like meat, oilseeds and nuts as well as spices have a much shorter export pattern whereas vegetables and fruits have long been on the list of export items. Growth in total food exports are bound to fluctuate if measures are not taken to boost exports of these items and their value-added products. Besides, bigger and permanent export revenue spinners like rice and seafood and off-and-on exports of wheat and sugar also need to be made more value-added to fetch higher per-unit price. “Keeping this context in mind, investment is required in technology and in research and innovation,” remarks a former TDAP chairman.

“If in a poor African country like Benin, people can run such successful projects that have tripled per-hectare yield of rice and if in Bangladesh and Sri Lanka, dozens of value-added export products can be made out of coconut, why can’t we do this here,” wonders an official of Karachi-based Multi Food Industries, exporters of frozen and ready-to-cook food items.

For quite some time the domestic market of value-added food items like frozen and ready-to-cook items has expanded but only a fraction of their production is exported. Exporters point out that unlike in domestic market where sales of these items are rising due to urbanisation, increase in income level and changing lifestyles, export markets cannot expand unless the quality is brought at par with international standards and prices are kept globally competitive. “Investment in technology is required for obtaining higher quality,” remarks a local flour miller who exports frozen parathas, rusks, buns, cakes and vermicelli to the Middle Eastern countries. On the other hand, “pricing cannot become more competitive unless we achieve economy of scale in exports which calls for better marketing.”

Broadly speaking, long-persisting power shortages and lack of investment in food value addition industry also mar prospects of sustainable exports growth.

In 11 months of FY14, rice exports did well but exporters say in June 2014 rice exports volume dropped to 150,000 tonnes from 254,000 tonnes in May not only because of thinning supplies before the beginning of the new marketing year in October “but also because power shortages affected rice milling too”, says Chela Ram Kewlani, senior vice chairman of Rice Exporters Association of Pakistan.

Exporters of fruits and vegetables, seafood and mutton etc also complain that power outages hit their processing business hard, resulting sometimes in cancellation of export orders and loss of export markets, and thus, adds to the cost of food exports undermining their efforts to remain competitive in the global market.

Published in Dawn, Economic & Business, July 14th, 2014