KARACHI, May 5: Pakistan exported $224 million worth of goods to Afghanistan in eight months to February 2004 showing a four-fold increase over a year-ago exports of $50 million. Businessmen say huge export potential exists in the landlocked country now struggling to boost its poor economy with a US-backed caretaker government in place.

Statistics compiled by the Export Promotion Bureau show that Pakistani exporters are trying to capture Afghan market for not only construction materials and fuel oil but also for consumer items.

In July-February 2003-04, exports to Kabul included $29 million worth of crude oil; $17 million cement; $11 million furnace burners and $4 million articles of asbestos-cement.

But at the same time Pakistan also exported $27 million worth of animal or vegetable fat; $12 million soyabean oil and its fractions; $9 million cane or beet sugar; $6 million worth of milk and cream and $3 million wheat.

"As infrastructure development is taking place in Afghanistan Pakistan can easily increase exports of construction materials," says a well-known ghee miller and exporter Mr Amjad Rashid.

His International Multi Group and Associated Group companies are among key exporters of engineering goods/ construction materials and food items to Kabul. "The demand for consumer items is also growing in Afghanistan. So Pakistani exporters can make further inroads in the Afghan consumer markets," he said while talking to Dawn.

Mr Rashid says exports to the troubled neighbouring country would pick up further when the Pakistani banks operating there start trade financing. National Bank and Habib Bank have opened their branches in Kabul but these branches are yet to offer a full range of services.

Exporters say Pakistan needs to improve its efficiency image in Kabul before it can penetrate well into the Afghan markets dependent on exports. They say that an inordinate delay in the construction of Torkhem-Jalalabad road by Pakistani contractors has created an image problem for Pakistani businessmen in Kabul.

They say though the Indians are making faster social contacts in Afghanistan generally the business community of the war-torn country views their Pakistani counterparts as natural partners.

So chances for that Pakistani exporters would be doing much better in Afghanistan in the times to come. But some irritants need to be removed. One of them is insurance cover. Insurance companies are reluctant to provide insurance facilities to the Pakistani businessmen having business facilities in Afghanistan.

Another issue relates to guarantees by the US-based Overseas Private Investment Corporation. If those making investment in Kabul can get extended cover from OPIC it would open up more and more business opportunities there also benefiting Pakistani exporters.

Exporters and officials of Export Promotion Bureau say if the current pace continues Pakistan can earn at least $350m through exports to Afghanistan during this fiscal year ending in June. In the last fiscal year exports to Kabul totalled $316 million.

Exporters say what belittles the export potential to Kabul is the rising incidence of smuggling particularly of food items from Pakistan. Businessmen say smuggling to Afghanistan is also a key factor in the recent wheat flour crisis that has hit Pakistan.

They say that ghee products made in Dubai and Malaysia using Pakistani brand names are also being smuggled into the land-locked country. The incidence of ghee smuggling has risen after the removal of ghee from the negative list of transit trade a couple of months ago.