Indonesian fresh fruit importers say Pakistan will face tough rivalry from China. Pakistan hopes to see an increase in exports of its famous Kinnow oranges to Indonesia, as it has started to infiltrate the market through giant retailers.
A press statement from the Pakistani Embassy made available to The Jakarta Post states that consignments of the Pakistani Kinnow have started arriving in Jakarta, and are currently being sold in many major grocery chains, including Carrefour, Ranch Market, Hypermart and Giant.
The Kinnow is a larger orange, touted to be extremely easy to peel and is cited as having a unique flavor as a result of the soil and climate in which they are grown.
“The Pakistani Kinnow made its entry into the Indonesian market at New Year and the Chinese New Year, to make them more joyous occasions. Last year, Pakistan’s exports of Kinnow oranges to Indonesia amounted to US$23 million and this figure is expected to grow significantly in 2017,” the press statement read.
Indonesia has a preferential trade agreement (PTA) with Pakistan, which began in 2013, and Pakistan’s Kinnow oranges are allowed access through the country’s main port in Tanjung Priok, North Jakarta.
In exchange, Pakistan exempts Indonesia, the world’s largest crude palm oil (CPO) producer, from paying 10 percent import duty on that commodity.
Following the PTA, imports of Kinnow oranges from Pakistan reached $19.3 million in 2014, from $3 million in 2013.
However, Indonesian Fresh Fruit and Vegetables Exporters and Importers Association chairman, Kafi Kurnia, said that it was unlikely Pakistan could significantly boosts its exports of Kinnow oranges because of fierce competition from similar oranges from China.
Kafi noted that since existing regulations limited the size of imports of certain fruits, importers tended to be choosier.
“The Kinnow imports arrived during a very good time, at around Chinese New Year. However, they have a lot of fierce competition, mostly from Chinese exporters. If my importing quota was limited, especially during this time, I would definitely prioritize oranges from China,” he told on Monday.
Even so, the Kinnow orange will remain a major competitor for locally produced oranges, as there was a lack of research and development that could help raise the quality of local fruit and vegetables.
Indonesia is also home to many other tropical fruits such as mangosteen, rambutan, snake fruit, jackfruit, soursop, breadfruit, guava and starfruit, but they are not exported in great quantities or even consumed heavily at home.
The government aims to boost tropical fruit production by expanding land for fruit plantations while also improving infrastructure and transportation systems to reduce high distribution costs, as part of efforts to become the biggest tropical fruit producer in Southeast Asia by 2025 and in the world by 2045.
Meanwhile, National Agriculture Council chairman Benny Kusbini concurred that a lack of uniform quality among locally produced fruit was an obstacle when it came to competing with imported fruit sold in Indonesia.
He also noted that poor infrastructure remained a problem as some fruits were cheaper to import than to transport from regions in Indonesia.
“The Kinnow, for example, can be very cheap to import from Pakistan to Indonesia. Sometimes 10 kilograms of Kinnows can be imported for only $5 to $6. Compared to oranges from Medan, for example, it is difficult to compete with those prices,” he told the Post.
Indonesia imported $666.37 million worth of fruit and $558.08 million worth of vegetables in 2015, according to data from Trade Map.
