The Afghan government has implemented a substantial increase in customs duty on kinnow imports effective from November 27, causing concern among exporters and local farmers.
Exporters report that Kabul is now imposing a customs duty of Rs2.9 million per 35-tonne container, marking a significant 43.5 percent surge from the previous year’s rate, as reported by Dawn. This development coincides with the commencement of the fruit harvesting season.
Sajid Hussain Tarar, President of the Sargodha Chamber of Commerce and Industry, expressed apprehension over the impact of the customs duty increase. He emphasized that it would not only affect kinnow exports but also adversely affect local farmers, leading to a potential drop in fruit rates in the local market due to reduced exports.
Sargodha, a major city of province Punjab, and its neighboring districts are key contributors to the production of high-quality citrus fruit, making this tariff hike particularly significant for the region.
Tarar highlighted Afghanistan’s importance as a substantial market for Pakistani kinnow, underscoring that the Kabul government has consistently taken measures against citrus fruit imports. He noted that the customs duty is increased from Rs2.02 million to Rs2.9 million immediately, following last year’s raise from Rs0.53 million to Rs2.02 million.
Concerned by the recent customs duty hike, Tarar disclosed that he has written a letter to the federal government and the commerce minister, urging them to address the issue with the Kabul government for a more reasonable tax structure and relief for exporters. He cautioned that achieving the export target would become challenging, as almost half of the total Pakistani kinnow exports are directed to the Afghan market.
Recalling a similar tax rate increase by Kabul last year, Tarar highlighted that Islamabad’s intervention led to a 60 percent reduction in the tax rate.
Former SCCI president Shoaib Ahmad Basra expressed fears that failure to resolve the customs duty issue could result in a significant decline in kinnow prices in the local market, potentially falling below Rs1,000 per 40kg compared to an average of over Rs2,000 per 40kg last year. This, he warned, could have devastating consequences for kinnow orchard owners, especially in the light of challenges such as whitefly attacks in certain kinnow zones.
