The High Price of Exporting Fresh Produce

Here’s a breakdown of the provided text, highlighting key points adn making connections:

Overall Theme: The article discusses the production, export, and pricing of onions and potatoes in Pakistan, wiht a particular focus on export potential and challenges.

Key Information about Production:

Onion:
Production in FY25 was 2.67 million tonnes, up from 2.3 million tonnes in FY24.
Exports have been dwindling due to cheaper Indian onions entering foreign markets.
Local crop production issues and international rates substantially impact onion prices.
Traders sometimes hold back supplies to artificially inflate prices.
Potato:
Production in FY25 rose to 9.4 million tonnes from 8.4 million tonnes in FY24.
Higher production has helped keep prices under control. Potato exports are strong: over 1 million tonnes out of 1.4 million tonnes of total vegetable exports in july-May FY25.
The Commonwealth Autonomous States (CIS) are a promising market for Pakistani potatoes, with shipments made via road.
Export potential could be significantly increased if quarantine issues are resolved with countries like Indonesia,Thailand,European countries,the Philippines,and China.
Potato consumption is increasing due to the rise of potato-chip-making companies.

Key Information about Pricing and Consumer Impact:

General Price Control: Higher production of both onions and potatoes has largely kept their prices under control in the past year.
price Drop: The sensitive Price Index shows a drop in national average prices for potatoes (Rs60-120/kg) and onions (Rs40-90/kg) compared to July 2024.
Price Checking Issues:
Lack of effective price-checking mechanisms.
Limited staff strength of the price regulating body.
Unrealistic price lists from the regulatory body.
Consumer Impact: Consumers face higher prices due to these checking issues, especially during Ramazan when demand exceeds supply.
Imported Onion Pricing: Afghani and Iranian onions landed in pakistan at Rs160-200 per kg in October 2024 due to damage to Sindh’s crop,but their quality is not as good as Pakistani onions.

Export Potential and Recommendations:

Potato Exports:
Focus: Efforts should be made to increase exports to CIS countries, where there’s a strong demand for potatoes.
Infrastructure: Improvement of road infrastructure in Pakistan and CIS countries is needed.
Logistics: Increasing exports thru reefer containers is recommended.
Market Expansion: Resolving quarantine issues with key markets (Indonesia, Thailand, Europe, Philippines, China) is crucial for boosting exports.
Onion Exports:
Challenge: Competition from cheaper Indian onions is making it difficult for Pakistani onions.
Quality: Pakistani onions are noted for their quality, which is superior to imported varieties like Afghani and Iranian.

Notable Quotes/statements:

“With higher potato production, efforts should be made to further increase exports to Common independent States where people’s love for potatoes is akin to Pakistanis’ love for wheat.” (Waheed Ahmed)
“We could not find new markets for vegetables, but the Commonwealth Independent States (CIS) have emerged as one of the most promising markets for Pakistani potatoes…” (Waheed ahmed)
“potato exports can increase manifold if the quarantine issues are resolved in markets like Indonesia, Thailand, European countries, the Philippines and China…” (Waheed ahmed)
“…onion holds the second spot in overall vegetable exports, but for the last three to four months, its export has been dwindling due to the entry of cheaper Indian onions in foreign markets…” (Waheed Ahmed)

Source: Published in Dawn, The Business and Finance Weekly, July 21st, 2025.

the article presents a mixed picture: While Pakistan has seen increased production and relatively stable prices for onions and potatoes due to good yields, challenges remain. For potatoes, the focus is on leveraging this success through increased exports to promising markets like the CIS and expanding access to new markets by addressing quarantine regulations. For onions, the challenge lies in international price competition, despite the quality of Pakistani produce. The article also highlights the inefficiencies in domestic price regulation, leading to consumer dissatisfaction even when production is high.

How do fluctuating fuel prices and port congestion collectively impact the overall cost of transporting fresh produce internationally?

The Complexities of Global Supply Chains

Exporting fresh produce – fruits, vegetables, and flowers – seems straightforward. Grow it, ship it, sell it. However, the reality is a labyrinth of costs that significantly impact profitability for farmers and, ultimately, prices for consumers. These costs extend far beyond simply getting the product from farm to port. Understanding these factors is crucial for anyone involved in agricultural exports, fresh produce logistics, or international food trade.

Transportation Costs: A Major Burden

Transportation represents one of the largest expenses in the fresh produce supply chain. This isn’t just about fuel; it’s a multifaceted cost structure:

Refrigerated Transport: Maintaining the cold chain is paramount. Reefer containers (refrigerated containers) are essential, adding significantly to shipping costs compared to standard containers.

Distance & Route: Longer distances naturally increase costs. Choosing optimal routes,considering factors like port congestion and fuel efficiency,is vital.

Mode of Transport: Options include sea freight, air freight, and land transport (trucking, rail). Air freight is fastest but most expensive,typically reserved for high-value,perishable items. Sea freight is the most common for large volumes, but slower.

Fuel Surcharges: Fluctuating fuel prices directly impact transportation costs, ofen with surcharges added to invoices.

Port Fees & Handling: These can be significant, varying significantly between ports.

Post-Harvest Handling & Infrastructure

The journey doesn’t end at harvest. Proper post-harvest handling is critical to maintain quality and minimize losses. This includes:

Cooling & Storage: Rapid cooling after harvest is essential to slow down respiration and extend shelf life.This requires investment in cooling facilities and cold storage infrastructure.

Sorting & Grading: Produce must be sorted and graded according to quality standards for export markets. This often requires manual labor and specialized equipment.

Packaging: Export packaging must protect the produce during transit, maintain freshness, and comply with import regulations. Modified Atmosphere Packaging (MAP) is increasingly used to extend shelf life.

Washing & Sanitizing: Meeting stringent food safety standards requires thorough washing and sanitizing processes.

Regulatory Compliance & Certification Costs

Exporting fresh produce involves navigating a complex web of regulations and certifications. These are designed to ensure food safety, plant health, and traceability, but they come at a cost:

Phytosanitary Certificates: Required by most importing countries to verify that the produce is free from pests and diseases.

Food Safety Certifications: GlobalG.A.P., BRCGS, and IFS are internationally recognized standards that demonstrate adherence to food safety best practices. Achieving and maintaining these certifications requires audits and ongoing compliance efforts.

Import Tariffs & duties: These vary depending on the importing country and trade agreements.

Customs Clearance: Navigating customs procedures can be complex and time-consuming, often requiring the services of a customs broker.

Traceability Systems: Many countries require full traceability of produce, from farm to consumer. Implementing and maintaining these systems can be costly.

Currency Exchange Rate Fluctuations

Foreign exchange risk is a critically important concern for exporters. Fluctuations in currency exchange rates can erode profits, especially when contracts are denominated in a foreign currency. Hedging strategies can mitigate this risk,but they also involve costs.

Insurance & Risk Management

Protecting against potential losses is crucial. This includes:

Marine Insurance: Covers loss or damage to the produce during transit.

political Risk Insurance: Protects against risks such as political instability, expropriation, and currency inconvertibility.

Quality Insurance: Covers losses due to quality defects or spoilage.

Labor Costs & Skill Shortages

The agricultural workforce is facing increasing labor shortages in many regions.This drives up labor costs and can impact the efficiency of harvesting,sorting,and packing operations. Investing in automation and training can definitely help address these challenges, but requires upfront investment.

Case Study: Kenyan Avocado Exports to Europe

Kenya has become a major exporter of avocados to Europe. Though, exporters face significant costs:

Air Freight Dominance: Due to the perishable nature of avocados and the need for fast delivery, air freight is frequently enough the preferred mode of transport, despite its high cost.

Strict EU Standards: Meeting EU food safety standards requires significant investment in quality control and traceability systems.

Competition & Pricing Pressure: Competition from other avocado-producing countries puts pressure on prices, squeezing profit margins.

Practical Tips for Reducing Export Costs

Optimize Logistics: Consolidate shipments, negotiate favorable rates with carriers, and utilize efficient transportation routes.

Invest in Post-Harvest Technology: implement cooling, storage, and packaging solutions that extend shelf life and reduce losses.

Seek Government Support: Explore export promotion programs and financial assistance offered by government agencies.

Build Strong Relationships with Buyers: Long-term relationships can lead to more favorable pricing and payment terms.

* Diversify Markets: reduce reliance on a