Report Highlights: 

As Afghan farmers continue to work toward rebuilding what was destroyed from years of war, with a great deal of international assistance, there is immense potential for Afghanistan to increase exports of dried fruits beyond just regional markets in Pakistan and India. With exports reportedly up in 2013, it looks as though Afghanistan might be on track to regain some of the ground lost.

Overview:

About 60 percent of the world’s dried fruits and nuts came from Afghanistan prior to 19801. As Afghan farmers continue to work toward rebuilding what was destroyed from years of war, with a great deal of international assistance, there is immense potential for Afghanistan to increase exports of dried fruits beyond just regional markets in Pakistan and India. With exports reportedly up in 2013, it looks as though Afghanistan might be on track to regain some of the ground lost.

Most Afghan fruits are still dried through traditional methods that leave produce open to contaminants and large variations in quality. This continues to be a limiting factor in exports to countries with strict import standards, but efforts by Afghanistan’s export promotion organizations are making headway. Despite the surge in exports, local wholesale and retail markets report that prices have remained the same, possibly caused by a decrease in domestic sales. Conversations with local traders, retailers and export promotion agencies indicate that uncertainty regarding the signing of the Bilateral Security Agreement between the United States and Afghanistan is having a negative effect on domestic sales.

Production:

Fruit trees make up 1.5 percent of arable land in Afghanistan. (Twelve percent of total land in Afghanistan is arable.) MY2013-14 estimates put production at 120,000 hectares (ha). In addition to orchards throughout the country, most farming households also maintain fruit trees for self-consumption.

Fig production is expected to increase significantly this marketing year in Kandahar as a result of good weather. Most of this increase in production will be exported. Kandahar is well positioned to export to Pakistan, India and Dubai due to its functioning commercial airport. Nearly all fig production in Afghanistan occurs in Kandahar province. Small increases in production are forecast for grapes, melons, apricots and mulberries throughout the country.

Drying Process:

The drying process for Afghan fruits is still largely done by traditional methods that do not meet international standards. However, the Afghanistan Raisins, Fruit and Vegetables Export Promotion Administration (ARF&VEPA) has led an effort to adopt international Codex standards. Adherence to Codex standards has allowed Afghanistan to begin exporting raisins to places such the United States, Switzerland and Australia.

The majority of raisins are still dried on mats on the ground or shade dried in Kishmish Khanas. Most figs are prepared for market in a process that involves partially drying the figs before machine pressing them and threading onto a long rope of figs. Dried mulberries are not widely exported, but are popular domestically as a snack food. Dried melons are a uniquely Afghan snack food. Afghanistan is home to the sweet melon, which is denser than other melons like watermelon and cantaloupe. With greater density and lower water content, sweet melons are able to be dried into long strips. Consumption is almost exclusively domestic.

Markets and Trade:

Afghanistan was historically known for the high quality of its dried fruits. There is still a large demand for Afghan dried fruits in India and Pakistan. However, the unsanitary traditional drying methods, inconsistent quality of product and lack of established or enforced standards have limited Afghanistan’s ability to export to markets with stricter import standards. Small strides have been made, however, particularly with raisins with their recent adoption of the global Codex standards. Storage facilities and transportation also remain a major obstacle to further export. In December 2013, the Ministry of Commerce and Industries reported that exports had doubled in 2013 from $62 million in 2012 to more than $100 million in the first six months of the 2013 Afghan calendar year (April to September) with much of that gain coming from dried fruit and nuts. 

Despite the rise in exports, local wholesale and retail markets in Kabul say that there has not been a related increase in prices, and domestic sales have actually gone down. Some wholesalers estimated the reduction in sales at three percent when comparing the first nine months of MY2012-13 (April-March) to the first nine months of MY2013-14. Retailers interviewed estimate the decline in sales at five to seven percent. Conversations with local traders, retailers and export promotion agencies indicate that uncertainty regarding the signing of the Bilateral Security Agreement between the United States and Afghanistan is having a negative effect on domestic sales.

In general, Afghanistan has a robust domestic market for dried fruit and nuts. In religious days like Eid-ul-Fiter, Eid-ul-Adha and Nawroz, the consumption of dried fruits rises dramatically. Traditionally in wedding parties and special events dried fruits are consumed with green tea.

The India Afghanistan Free Trade Agreement is known as IAPTA (India Afghanistan Preferential Trading Agreement). The objectives of this Agreement are to promote through the expansion of trade the harmonious development of the economic relations and to provide fair conditions of competition for trade between India and Afghanistan.

The Afghanistan-Pakistan Transit Trade Agreement (APTTA), which was signed in July 2010 and has experienced sporadic enforcement since, seems to be gaining more standard adherence. The APTTA allows for Afghan goods to transit through Pakistan, an important component in Afghanistan’s ability to export to India. At the same time, Afghanistan has increased its utilization of Iran’s Chabahar Port, which allows Afghan goods to bypass Pakistan en route to India. To further encourage trade with India, the India-Afghanistan Preferential Trade Agreement gives Afghanistan preferential treatment on a number of tariffs, including a 50 percent margin of preference for dried fruits such as raisins and apricots and a 100 percent margin of preference for dried figs and dried mulberries