Articles

The recent shift in the dynamics of international trade presents a captivating paradox. On one side, we see Pakistan's exports to the United Arab Emirates (UAE) slipping down the slope with a 14.18 percent decrease in the first ten months of FY23. This decline, largely contributed by a significant reduction in exports to the UAE, presents a potential hurdle for Pakistan's economic growth. On the flip side, the scenario can be viewed as an enticing opportunity for Indian exporters, particularly in the sectors of agricultural produce, meat, and textiles.

As an export-import expert, I urge Indian exporters to seize this moment of transition. Here's why:

There are several reasons for the decline in Pakistan's mango production, affecting exports:

1. Heatwaves and High Temperatures: The unusually high temperatures due to heatwaves have severely impacted the mango crops. These conditions led to a drop of about 50-60% in mango production. Mangoes are sensitive to temperature changes, and prolonged exposure to extreme heat can lead to fruit drop, flower wilting, and ultimately a significant reduction in yield.

2. Climate Change: Overall climate change, including unpredictable weather patterns and shifts in seasonal temperatures, have negatively affected mango production. Sudden changes in temperature during critical growth periods can disrupt normal plant development, leading to lesser yield and quality.

3. Water Shortage: The availability of water is critical for mango farming. A shortage of canal water, possibly due to changes in rainfall patterns or competing water demands, has negatively impacted mango production. The lack of sufficient water is especially problematic during periods of high heat when plants need more water.

4. Energy Crisis: Load shedding and a shortage of diesel fuel for irrigation systems have further exacerbated the water shortage issue, leading to a severe impact on mango cultivation. Reliable energy supply is crucial for maintaining irrigation systems, especially in regions where rainfall is insufficient.

5. Pest Attacks: Pest attacks reportedly occurred earlier than usual, further damaging the mango crops. Pests can cause significant damage to the plants, affecting both the quantity and quality of the yield.

6. Lack of Relief: The absence of natural relief, such as rain, worsened the conditions for mango farming. Rain provides much-needed water for the crops and can also help mitigate the heat.

7. Pollinators: The article mentions that there were fewer pollinators visible during the flowering period, likely due to the abrupt temperature rise. This could have affected the fruit set and ultimately the yield.

8. Size and Quality: Some varieties of mangoes, like Sindhri, were reported to be smaller and deformed due to the high temperatures, impacting the proportion of exportable fruit.

Each of these factors contributes to the overall decline in mango production, leading to less availability for export.

India, being the largest producer of mangoes globally, has adopted various measures to combat similar issues affecting mango production. Here's how India has addressed the above-mentioned problems:

1. Heatwaves and High Temperatures: Indian farmers have utilized a variety of techniques to manage heat stress, including mulching and intercropping. Mulching helps retain soil moisture and moderate soil temperature. The government has also been promoting climate-resilient varieties of mangoes which can better withstand heat stress.

2. Climate Change: India has initiated multiple research programs to develop and promote climate-resilient crops, including mangoes. These varieties are better adapted to withstand fluctuations in weather patterns. The use of advanced weather forecasting systems also helps farmers to better prepare for changing weather conditions.

3. Water Shortage: Drip irrigation systems have been widely adopted in India, enabling efficient water use. These systems deliver water directly to the root zone of the plants, reducing evaporation and runoff. The government provides subsidies to encourage farmers to adopt these technologies.

4. Energy Crisis: To combat energy shortages, India has been promoting solar-powered irrigation systems. These systems not only reduce dependence on grid power and diesel but also have environmental benefits.

5. Pest Attacks: Integrated Pest Management (IPM) strategies have been promoted in India to minimize pest attacks. IPM combines biological, cultural, physical, and chemical tools in a way that minimizes economic, health, and environmental risks.

6. Lack of Relief: Indian authorities have implemented crop insurance schemes to protect farmers from the financial impact of natural disasters. The Pradhan Mantri Fasal Bima Yojana (PMFBY), for instance, compensates farmers for losses due to adverse weather conditions.

7. Pollinators: To tackle issues related to pollinators, efforts have been made to conserve and increase pollinator habitats around farms. Awareness programs educate farmers about the role of pollinators and the need to avoid pesticides that can harm them.

8. Size and Quality: Research institutes in India have developed protocols for the use of plant growth regulators to improve fruit size and quality. Post-harvest management practices have also been improved to maintain quality.

In addition, India's robust supply chain, large domestic market, and favorable trade agreements also provide it with an advantage when dealing with fluctuations in export markets.

UAE has been the top destination for Pakistan's exports, accounting for around 63 percent of the country's total exports. With the drop in Pakistan's exports, a void is being created in the UAE market. This void is a potential gold mine for Indian exporters who can step in to supply the products that are currently facing a supply crunch.

Specifically, Indian exporters could capitalize on supplying commodities like rice, meat products, textiles, and fruits like guavas and mangoes, which are top exports from Pakistan to the UAE.

Setting Favorable Payment Terms

In the wake of reduced supply from Pakistan, UAE importers will be more inclined to agree on favorable payment terms to secure a steady supply of commodities. This is especially true for seasonal produce like mangoes.

Indian exporters can leverage this situation to their advantage. They can ensure they avoid extending credit via unsafe payment terms, instead insisting on secure payment methods and terms that safeguard their interests.

This scenario provides Indian exporters a strategic advantage to negotiate better payment terms, which could set a new standard for future trade relationships.

The Power of Unity

The current situation underscores the importance of collective bargaining power. The real-time challenge for Indian exporters is to unite under one banner and present a strong front. Instead of competing against each other, exporters should see this as an opportunity to collaborate and enhance their bargaining power.

This is not to suggest price-fixing, but rather a common understanding among exporters to refuse unsafe credit terms and supply goods only against secure payment terms. A united front will be more successful in achieving this, without succumbing to the pressures of individual business concerns.

Preparing for the Future

Lastly, it's essential to understand that this is more than just a short-term opportunity. A successful venture into the UAE market could pave the way for stronger trade relations and broader market access in the future. Hence, Indian exporters should not only focus on immediate gains but also strategize to build sustainable, long-term business relationships with their UAE counterparts.

The current dip in Pakistan’s exports to the UAE may be a moment of concern for some, but as they say, every cloud has a silver lining. For Indian exporters, this could be a golden opportunity to expand their horizons, establish favorable trade norms, and make a strong foothold in the UAE market.