Afghan crisis to impact dry fruit prices

India’s dry fruits trade is pinning hopes on the government to re-introduce incentives for dry fruits imports from Afghanistan, given the surging demand in the domestic market.

The Centre has stopped giving concessions from August after the change in the Afghan government, and the decision to impose duties by India will impact the prices of dry fruits, Rahul Kamath, Director of Bolas Agro Pvt Ltd, Mangaluru said.

Being a signatory to SAFTA, it is pointed out that the imports from Afghanistan enjoy duty concessions with a maximum tariff of five per cent against 30-40 per cent to other countries.

The current political instability in Afghanistan, according to Kamath, has hit dry fruits supply to India, impacting its availability, especially in the peak demand season of September and October. Many corporate buying of dry fruits is happening in these two months in connection with the festival season starting from Navarathri up to Diwali.

“It is unlikely to believe that the Taliban will put any curbs on exports to India in view of the monetary benefits involved in it. India is one of the biggest buyers of Afghan dry fruits and the government there will not hinder anything against the business prospects”, he told BusinessLine .

However, it is up to the Indian government to decide on extending concessions for imports taking into account the possibility of its impact on the domestic market, he added.

Price impact during festival season

J.Rajmohan Pillai, the chairman, Beta Group, which owns the brand Nut King, said that the Afghan crisis is likely to raise dry fruit prices in India, but it is unlikely to have a severe impact on the trade in the long run, as the consignments find a market in the country through Singapore, Dubai and elsewhere.

Afghanistan would continue their trade relations with UAE as its transit hub, which would enable India to import products. However, the crisis has affected Afghan farmers as the rate of their crops has already started to dip and will go down further, he said.

However, the current crisis will impact the prices of dry fruits, especially during the festival season, as they are expected to go up by 10-15 per cent. The rates will normalise soon as the burgeoning Indian domestic demand provides a good market for Afghanistan. “`They have to sell the products at any cost, otherwise the crops will perish,” he said.

The trade between the two countries is also linked to India’s recognition of the Taliban government, he added.

India imports dry fruits such as walnut, almonds, figs, apricots, cumin, pistachio, raisins, cherry, watermelon and some medicinal herbs with a total annual trade of around $1.4 billion. India also imports dry fruits from the US, Iran, Turkey and Pakistan. Though the dry fruits from the US are five per cent cheaper, the imports are costly because of the tariff, he said.

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