Pakistan produces nearly a million metric tonnes of mangoes, exports 6-7pc of the produce and claims around 3.8pc share in the global market.
The country’s mango exports, during the last three years, have gradually declined from a peak of 103,487 MT in 2012-13 to 64,111 metric tonnes (MT) in 2015-16.
Mangoes are not only Pakistan’s national fruit but a unique product in multiple ways. They are a cultural agent, a networking tool, a social bonding instrument and a diplomatic emissary, worthy of being gifted to heads of states.
Currently a meagre 3pc of mango produce is processed into value added products, which signifies the tremendous untapped potential for value addition
As a business product, mangoes operate in a highly competitive global environment. Asian countries dominate the 45 million MT global mango production.
The global mango market has its peculiar dynamics. Firstly, in contrast to mango production which is dominated by Asian countries, mango exports are dominated by South American countries — Mexico, Peru, Brazil and Ecuador.
The main reason is the consumer preference in premium import markets for the firm, less-sweet South American mango varieties: Keitt, Kent and Tommy Atkins.
The major Pakistani mango varieties available in exportable quantities, Sindhri and Chaunsa, are soft and yellow with high brix value (sweetness) and are predominantly consumed in the ethnic (Asian) consumer segment rather than the mainstream market.
North America and Europe are the premium import markets with a 62pc share in global mango imports which have been stagnant at around 1.7 MMT ($ 2.5 billion) for the last five years.
The South American varieties have a longer shelf life of around 30-35 days and are marine shippable to premium markets; Pakistani varieties, due to their short shelf life, have to be airlifted at a 10-15 times higher freight cost which makes them uncompetitive in the mainstream consumer segment.
Mango, being a food product, is subject to stringent food safety and SPS requirements concerning hygiene, maturity level and Maximum Residue Level (MRL) of pesticides.
In 2014, the EU imposed a ban on Indian mangoes due to high residue levels.
In order to avert a similar ban, the Pakistani quarantine authorities, instead of improving the conformity standards of the produce, placed a voluntary restraint on export of mangoes to the EU. Exports nosedived as result.
Different import markets have different mandatory post-harvest processing requirements for mangoes — hot water treatment (HWT) for the EU, vapour heat treatment (VHT) for Japan and irradiation for the US. The cost of compliance amplifies.
Due to the above reasons, Pakistani mango exports are mismatch with the global market profile — 70pc of global imports are by the US, EU, Vietnam and China, whereas 77pc of our exports are to the Middle East.
The mangoes exported to the EU are mainly consumed in the ethnic segment, willing to pay the price premium for the adapted taste buds.
Exports to the US have more political appeal than commercial potential as the $3- $4 airfreight per kg, added to a $0.9 cost of product, distorts the economics of exports beyond proportion.
The supply side gaps cause 30-40pc wastages besides shaving off the quality premium.
The skill deficit of growers in farm practices — tree pruning, pest and disease management, and fertiliser and irrigation practices — affect yield and quality, while the harvesting practices by contractors — bruising from harvesting by pole-hitting, immature harvesting and sap-burn — downgrade fruit quality.
The commercial exporter, whose role is necessitated for consolidating export shipments sourced from multiple small farms, employs manual grading, sorting and packaging practices rather than modern technologies.
The infrastructure for HWT and VHT treatment, ethylene-ripening and modern pack houses is limited. An integrated cool chain is non-existent.
The institutional support for bridging the gaps along the value chain is ineffective as the Pakistan Horticulture Development and Export Company (PHDEC) is organisationally moribund.
With improved farm and post-harvest practices, wastage can be drastically reduced, thereby increasing the availability of exportable surplus.
Besides, currently a meagre 3pc of the produce is processed into value added products, which signifies the tremendous untapped potential for value addition.
On the market side, Pakistani varieties with their unique taste, high brix value, soft texture, pleasing aroma and low fibre, can capture a price premium in the exotics category.
With the development of marine shipment protocols for Sindhri, the export volumes and price margins in the mainstream market segment have been rapidly increasing.
In the ethnic segment, Pakistani varieties already enjoy higher consumer acceptance compared with the Indian Alfonso and enter the mango calendar when Alfonso is on its way out.
In existing mango markets such as the Middle East, there is the potential for an enhanced average unit price with improved product presentation.
The export potential of mangoes can be unlocked by instituting improvements in the value chain — varietal diversification, improvements in pre-harvest practices and harvesting techniques.
Mechanisation of post-harvest processes, up-gradation of packaging and presentation, establishment of modern pack houses as common facility centres, can also unlock potential, along with certification of orchards and pack houses for traceability, development of integrated cool chain and value addition.
On the market side, exports can be optimised in both segments — ethnic and mainstream.
The strategy can include (a) positioning Pakistani mangoes as an exotic fruit in premium markets for a higher price point, (b) pull-marketing through taste development of mainstream consumers, and (c) increasing availability for the fragmented-but-captive ethnic segment, willing to pay the price premium.
The writer is Director General (Trade Policy), Ministry of Commerce
Published in Dawn, The Business and Finance Weekly, July 10th, 2017