Enhancing dairy sector export competitiveness - International Trade ...

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ENHANCING DAIRY SECTOR EXPORT COMPETITIVENESS IN PAKISTANMarket analysis on export of dairy milk from Pakistan to Gulf Region reflects that in these countries also,Pakistan might not be able to gain immediate market share due to the fact that intra Gulf CooperationCouncil (GCC) trade in dairy milk is very strong. It was recorded at US$ 17.239 million which was almost72% of total imports of GCC is in dairy milk. GCC countries imported dairy milk to the level of US$ 0.076million, accounting for 0.32% of their total imports in the same product category.For short and medium term, Pakistan’s potential exports markets for dairy milk can be Singapore, HongKong and Philippines, mainly due to market size and geographical location of these countries. Table 9reflect time series export value, quantity and unit value of dairy milk imported by these countries from 2007to 2011. The statistics show that all targeted or potential markets provide desired profitability that can becompared with the prices offered in Afghanistan. But since Pakistan has already taken a major share inAfghanistan’s market, the most viable markets that could be explored in the short run are Singapore, HongKong and Philippines.Singapore applies zero ad-valorem tariff (estimated, based on the data from 2010 using HarmonisedSystem Nomenclature Rev. 07, to products originating from Pakistan). Hong Kong (SAR China) applieszero ad valorem tariff (estimated, based on the data from 2012 using Harmonised SystemNomenclature Rev. 12, to products originating from Pakistan). Philippines applies 3% ad valorem tariff(estimated, based on the data from 2007 using Harmonised System Nomenclature Rev. 02, to productsoriginating from Pakistan). Pakistan has been awarded MFN status by all the said countries.Table 9: Dairy Milk Imports by Potential Countries(Export value in 000’ US Dollars)Countries Value 2007 Value 2008 Value 2009 Value 2010 Value 2011Singapore 37,299 48,748 46,398 57,599 66,541Hong Kong 41,245 45,992 47,453 55,287 60,541Philippines 29,098 36,016 30,009 45,399 47,350Volume in TonsQuantity Quantity Quantity Quantity QuantitySingapore 46,854 50,579 51,806 60,096 63,455Hong Kong 56,266 51,870 50,993 55,976 60,296Philippines 40,792 41,470 43,747 54,496 51,129US Dollar ThousandUnit PriceUS$/TonUnit PriceUS$/TonUnit PriceUS$/TonUnit PriceUS$/TonUnit PriceUS$/TonSingapore 796 964 896 958 1,049Hong Kong 733 887 931 988 1,004Philippines 713 868 686 833 926Afghanistan 849 667 729 880 940Source: International Trade Centre (ITC)Table 10 shows leading suppliers or competitors of Pakistan in potential markets.41
ENHANCING DAIRY SECTOR EXPORT COMPETITIVENESS IN PAKISTANTable 10: Partner Countries of Potential Dairy Milk Import MarketsPotential Markets Supplying Countries in 2011SingaporeHong KongPhilippinesThailand, Australia, Indonesia, New Zealand and India.Australia, China, Indonesia, Japan, Thailand and India.New Zealand, Brazil, Thailand, Australia and IndiaSource: Author’s calculations based on UN COMTRADE statisticsMilk and Cream PowderPakistan’s export of milk and cream powder is predominantly directed to Afghanistan that characteristicallytakes more than 95% share of dairy milk. In 2011, Pakistan’s exports of milk and cream powder productswas recorded at US$ 11.941 million out of which US$ 11.871 million was exported to Afghanistan. Thataccounted for 99.41% of total exports of this category only to Afghanistan. On the other hand, the totalimports of Afghanistan in the said category were recorded at US$ 14.36 million in the year 2011.Pakistan’s share in Afghanistan’s market was 83% (about US$ 12 million). Other markets to whichPakistan exported these products in the same period were UK, Canada, United States and Hong Kong.Potential Markets for PakistanAnalysis of exports in milk and cream powder products from Pakistan to EU reflects that Pakistan may notbe able to find an easy entry into the EU market due to strong intra EU trade in the said product category.The intra EU trade during 2011 in milk and cream powder was recorded at US$ 1,099 million, almost 99%of total EU’s imports of US$ 1,110 million) while imports from the Asian countries remained 0.06% of thetotal or US$ 0.659 million.The analysis of export of milk and cream powder from Pakistan to GCC (six countries) reflects thatPakistan may be able to find its space in GCC as intra GCC trade in 2011 stood at US$ 146 million, whichwas almost 18% (total import of GCC stood at US$ 808 million), while GCC imports from Asia excludingGCC stood at just US$ 12 million (almost 1.49% share). For short and medium term, Pakistan’s potentialexports markets for milk and cream powder products can be Indonesia, Singapore, Nigeria and Sri Lanka.In order to choose potential markets following parameters were considered:• Import market size (including import trends)• Geographical location (nearness of market from Pakistan)• Unit price value of product• Tariff applied by the potential countryTable 11 reflects time series export value, quantity and unit value of milk and cream powder productsimported by these countries from 2007 to 2011.According to the statistics, all targeted potential markets provide desired profitability which can becompared with the prices offered in Afghanistan but as Pakistan has already taken a large share in thismarket, the only viable markets in the short run are Indonesia, Singapore, Nigeria and Sri Lanka. Indonesiaapplies 5% ad valorem tariff 48 Singapore applies zero ad valorem tariff 49 . Nigeria applies 15% ad valoremtariff. 50 Sri Lanka applies 30% ad valorem tariff- 51 Pakistan has been awarded MFN status by all the saidcountries. Although Pakistan has Free Trade Agreement (FTA) with Sri Lanka, however, these productsare placed in negative list.48Estimated, based on the data from 2011 using Harmonised System Nomenclature Rev. 07, to products originating from Pakistan..49 Ibid.50 Ibid.51 Ibid.42
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