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25 pc freight subsidy likely on Kinoo export to Bangladesh

ISLAMABAD: The Federal Government is likely to allow a subsidy of 25 percent on freight charges for the export of 10,000 tonnes of Kinoo to Bangladesh.

Official sources told Fortuna on Monday that in this connection, the Ministry of Commerce has submitted a summary before the Economic Coordination Committee (ECC) for a decision.

Sources said the ECC has been informed by the commerce ministry that this subsidy of Rs 18 million on freight charges will result in the income of Rs 150 million.

The commerce ministry has pointed out that annual production of Kinoo in Pakistan is around two million tonnes. It adds that last year Pakistan exported 51.269 tonnes of Kinoo and earned 9 million dollars. "Our main export markets at present for Kinoo are Dubai, Singapore, Indonesia and Philippines," sources quoted the commerce ministry as submitting to the ECC.

Sources maintained that the commerce ministry has told the ECC in order to explore new markets, the Export Promotion Bureau (EPB) had sent a delegation of Kinoo growers and exporters to Bangladesh in January this year. "The delegation also held a Kinoo show in Dhaka during their visit there. The feedback received has been very positive," claimed commerce ministry.

"Bangladesh could be a potential market for Pakistani exporters of Kinoo" observed commerce ministry, adding that the main impediment in export of Kinoo to Bangladesh is absence of direct shipping service from Karachi to that country. "Indirect route takes 18 to 20 days which damages the quality of Kinoo as it is a perishable commodity with short shelf life," commerce ministry said.

It adds that the matter regarding shipping constraints faced by Kinoo exporters of perishable products to Bangladesh has been exhaustively examined by the EPB in consultation with the exporters and the only option left is to ship perishable products to Bangladesh on reefer containers. "The private sector has not been able to use this option before as the freight charges for reefer containers are 3 to 4 times higher than normal containers and their export calculations become unviable against their competitors."

"We are expecting to export around 10,000 tonnes of Kinoo to Bangladesh provided we allow a subsidy of 25 percent (as has been in the case of potatoes) in freight as a tool to penetrate the Bangladesh market," observed the ministry. "This will entail a payment of approximately Rs 18 million. The foreign exchange earning will be around $3 million (Rs 150 million)", the commerce ministry has claimed.

Sources said now the commerce ministry is of the view that the exporters may be given a subsidy of 25 percent on the freight from the Export Development Fund established in the ministry of commerce.

However, these sources said the commerce ministry has also put some conditions for the Kinoo exporters as well.

Sources said the commerce ministry has also suggested to the ECC that the freight subsidy will be available only on shipment to Bangladesh. And, it adds the subsidy will be available only if shipments are made through reefer containers.

"Further, the commerce ministry has said that subsidy will be available on shipment made till April 30, 2000 only. Fortuna