PAKISTAN stands a chance to boost food exports to the Central Asian nations. Russia is limiting food exports to beef up food stocks at a time when the global oil price plunge has hit its economy and paled its currency.

Six former Soviet states Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, on the other hand, are witnessing food trade falling amongst themselves and diversifying import sources. Exporters say this factor, too, can help us increase our food exports to most of these markets.

Falling global oil prices have weakened forex inflows of the Central Asian states that depend heavily on oil revenues. But this has happened at a time when overall imports of four of them, Azerbaijan, Kazakhstan, Kyrgyzstan and Tajikistan have been rising. This also should support Islamabad’s efforts to export more food items there.

Making a deeper penetration in the Central Asian food market is possible. But for this to happen, an uninterrupted availability of exportable surplus is a must, and that cannot occur without sustainable growth in per-acre yield of farm produce

Historically, Pakistan’s exports to Central Asia have remained very low, and despite greater interaction with them in last five years or so, our export earnings from there in FY14 stood at just $55m or less than 0.25pc of total exports.

TDAP officials say this can be raised to 1pc of total exports or even $250m plus within 1-2 years if our exporters tap huge potential for food exports including wheat, rice, sugar, maize, fruits and vegetables, seafood oilseeds, spices and pulses etc. They maintain that there is almost no scope for meat exports to Central Asia.

Exporters and TDAP officials say food exports to Central Asia could be raised replicating at least three workable models. One is finding ways to boost export of one big-ticket item, they add, citing example FY14’s $20.5m exports to Azerbaijan, nine time higher than $2.25m in FY13. They agree that to tap big food exports market in Central Asia, we need to repeat such success stories for a few years, in as many countries of the region as possible.

Another possibility is sustaining exports of a selected food item consistently like we did in Tajikistan where we exported sugar worth $9m and $8m in FY13 and FY14 respectively. Example of a third model can be found in our maiden exports of potatoes worth $0.5m to Uzbekistan in FY14. This shows the significance of tapping the actual market demand as and when it arises.

This year, Tajikistan has shown interest in importing wheat and sugar. And a delegation of Tajik businessmen and officials have already held talks with our officials and exporters. Chances are that Tajikistan would buy at least 100,000 tonnes of wheat and tens of thousands of tonnes of sugar.

Instead of waiting for the Central Asian countries to reveal their requirement to us, we must do some timely marketing for our surplus wheat there, exporters say. Kazakhstan’s wheat and wheat flour exports to neighboring countries are projected to decline in 2015 because of production concerns and Kazakhstan is also augmenting domestic food stocks.

Exporters say with a little help from TDAP and other government agencies they can explore wheat export markets there.

At least three Central Asian states’ requirement for food grain is set to rise because of expanding gap between domestic output and consumption.

Between 2007 and 2012, the total domestic consumption of food grains have outweighed production in Tajikistan, Kyrgyzstan and Uzbekistan, according to a research report of University of Central Asia. Even Kazakhstan, which exports cereals, has been importing large amounts of other food items like prepared foods, fruits, dairy products and vegetables. Tajikistan, Kyrgyzstan and Uzbekistan, too, have been importing these items in addition to grains and flour.

So, making a deeper penetration in Central Asian food market is possible. But for this to happen, an uninterrupted availability of exportable surplus is a must and that cannot occur without sustainable growth in per-acre yield of wheat, maize and sugarcane. Besides, exports of fruits and vegetables, there can also be increased if we export them in frozen form keeping in view the long route to Central Asia via Afghanistan. Citrus fruits and potatoes are exceptions though.

Unlike the promising Central Asian food export markets which cannot yield large export revenues in the near future, immediate additional export earnings are possible from the GCC countries.

Bulk of our food export earnings come from these countries and we already have big markets there for wheat, sugar, rice, meat, meat products, fish, prawn, oilseeds, spices and herbs.

A supporting factor here is the growing import spending of GCC states which doesn’t look like falling anytime soon. In 2013, cumulative imports of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE increased by 11.7pc, or by $53bn in terms of value.

Saudi Arabia, while announcing a deficit budget for 2015 due to fall in oil price, still projected higher spending which means imports spending spree of Riyadh is intact.

Pakistan and other Asian nations obviously have still enough room to export more to Saudi Arabia. And, in our case food items alone can fetch tens of millions of dollars as overseas Pakistanis and other expatriate Asians living in Saudi Arabia and other GCC nations fondly consume Pakistani fruits and vegetables, meat, seafood and rice.

Published in Dawn, Economic & Business, January 6th, 2015

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