LAHORE: Pakistan and China are set to enter into an agreement for a joint venture for export of dried red chilli to China in the wake of the recent memorandum of understanding (MoU) on protocol of phytosanitary signed in Islamabad during the three-day visit of Chinese Vice Premier He Lifeng.

The $30m (around Rs9bn) joint venture is likely to be signed under the business-to-business mode between the Litong Foods of China and the Guard Agricultural Research & Services of Pakistan next week.

In the five-year agreement, Guard will produce at least 15,000 tonnes of sun-dried red chilli under contract farming for the Litong Food, which will transport the produce to its value-addition plants in China before marketing it in the local market there.

“In the first year, 5,000 tonnes of sun-dried chilli will be produced as we wish to tread cautiously on the new crop for our company though Litong is offering to pick 15,000 tonnes consignment from us for export purposes,” says Guard’s Chief Executive Officer Shahzad Ali Malik.

However, we are determined to expand the chilli production to 30,000 tonnes by the end of the five-year agreement, he tells Dawn.

He explains that hybrid red chillies will be sown for the export purpose and trials of the hybrid seeds have already been successfully conducted at the company’s research facilities in south Punjab and interior Sindh.

“We have successfully reaped 75 maunds per acre yield of chilli crop from three different Chinese varieties in the local environment against 25-30 maunds produced by indigenous seeds.”

Malik says Chinese hybrid varieties whose fruit is over six inches long had been sown on 7,500 acres of land in different districts of Sindh and Punjab and they would be cultivated on at least 30,000 acres of land in the next season.

China consumes around 150,000 tonnes per annum of chillies used in sauces, soups and other food products. Out of it, 60,000 tonnes are imported from India. Due to recent geo-strategic repositioning in the region, Beijing is looking for other sources, particularly neighbouring Pakistan, to import the food item.

“Both Litong Foods, a major seed breeder, and Guard have already successfully experienced sowing of hybrid chillies in Pakistan and now they are moving towards materialising the dream of ousting India from the Chinese market of dried chillies,” Malik says.

He adds that training of local farmers on good agriculture practices for chilli crop and for sun-drying the fruit has been completed.

In the near future, primary and deep processing units for value-added services of the crop will also be established to add more value and jobs for the locals, he says.

Published in Dawn, August 7th, 2023