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COPYRIGHT 2004 - ALTAI CONSULTING, KABUL - AFGHANISTAN1

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Agenda

Project Presentation

Global Market

Production and Marketing in Afghanistan

Short-Listing of Opportunities

Next Phase

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Project presentation

Objectives

Why is horticulture a key sector to promote in

Afghanistan?

Agriculture and forestry represent 53% of the GDP

Afghanistan is a chronic food deficit country – lack of land and irrigation water (in 2003 record year: 2.45 million ha irrigated* = 1100 m2/inhabitant)

600,000 Afghan farmers are cultivating horticulture crops*

High value horticulture products give a better return to farmers than staple crops

Climate suitable for high quality fruits and vegetables

Afghanistan is the center of origin of various horticulture species (pistachio, walnut and pomegranate)

Some fruit varieties have international interest for their quality (pomegranates, apricots, almonds, raisins)

(*) Source: Various FAO agriculture surveys conducted in 2003. www.fao.org/world/afghanistan

Promote horticulture development through business opportunities for the private sector

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Phase 1

Market research

Supply & Demand analysis for horticulture products

Short-list of promising opportunities

Phase 3 Implementation and business plans

Phase 2 Field feasibility study

Phase 4 Sourcing of stakeholders

IMPLEMENTATION

Project presentation

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Project presentation Sources of information

ONE TO ONE INTERVIEWS

Government Institutions and International Organizations in Afghanistan

Custom officers at border points

Traders, Factories, Wholesalers, Middlemen, Retailers and Farmers in Afghanistan

Buyers in Dubai and Europe

Indirect interviews in Russia and India

REVIEW OF LITERATURE

FAO, AREU, ICARDA, UC DAVIS, DAI, WORLD BANK, UNODC, UNDP, UCTAD

CTIFL, CPI, USDA, AC NIELSEN, REUTER

MADERA, GRET

UNIVERSITY OF GENEVA

POLYTECHNIC OF LILLE

CONSTRAINTS

Difficulties to obtain reliable data (production, market, import/export): production and trade in Afghanistan are not monitored

Logistic and security constraints to travel to border points in Afghanistan

ANALYSIS OF SURVEY DATABASE

FAO, Agriculture Survey, 2003

Information research were made both from existing literature andon the field with 5 teams investigating in main provinces of Afghanistan and abroad

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Project presentation Geographical coverage of interviews

West

South-West

North

South

North-East

EastWest-Central

RUSSIA

INDIA

BLUE: Indirect interviews

KABULHerat

Mazar-e Sharif

Kandahar

Jalalabad

Ghazni

Kunduz Taluqan

Peshawar

Quetta

Lahore

EUROPE

DUBAI

Bamyan Charikar

Maidan Shahr

RED: Direct interviews

Islam Qala

Turghundi

Aqeena

HairatanSherkhan

Ai Khanum

Turkham

Spin Boldak

GREEN: Border Custom Office interviews

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Project presentationInterviews of international playersKey actors across all levels have been consulted through one to one interviews.

DRIED FRUITS TRADERSDRIED FRUITS TRADERSDRIED FRUITS TRADERS

ABDEL KHOSH – IRANAbdel Khosh, PresidentCANASIA – CANADAH.J Wais, PresidentGLOREX – DUBAIRamesh. D. Jatwani, Managing DirectorHUSSAIN ALI KIKHA & SONS CO – DUBAIAsadulla Kikha, ChairmanVOICEVAL – EUROPEAlexis Sumar, CEO France

FOOD TRANSFORMATIONFOOD TRANSFORMATIONFOOD TRANSFORMATION

LEADING AGRIBUSINESS GROUP – FRANCE Purchasing Manager (Confidential Agreement)ALTER ECO – FRANCETristan Leconte, CEOINTERNATIONAL FOODSTUFFS – UAEOlivier D’souza, Sales ManagerMITCHELL’S FRUITS FARMS – PAKISTANTariq Mahmood, Commercial ManagerQARSHI INDUSTRIES – PAKISTANDr Fahim Qureshi, Marketing DirectorSHEZAN INTERNATIONAL – PAKISTANSaifi Chaudhry, Chief Executive

LEADING AGRIBUSINESS GROUP – FRANCE Purchasing Manager (Confidential Agreement)ALTER ECO – FRANCETristan Leconte, CEOINTERNATIONAL FOODSTUFFS – UAEOlivier D’souza, Sales ManagerMITCHELL’S FRUITS FARMS – PAKISTANTariq Mahmood, Commercial ManagerQARSHI INDUSTRIES – PAKISTANDr Fahim Qureshi, Marketing DirectorSHEZAN INTERNATIONAL – PAKISTANSaifi Chaudhry, Chief Executive

INSTITUTIONSINSTITUTIONSINSTITUTIONS

COLEACP – EUROPECatherine Guichard, General SecretaryMAX HAVELAAR – EUROPEKarine Laroche, New business directorRAC (Recherche Agronomique de Changins) –EUROPEPhilippe Money, Horticulturist

COLEACP – EUROPECatherine Guichard, General SecretaryMAX HAVELAAR – EUROPEKarine Laroche, New business directorRAC (Recherche Agronomique de Changins) –EUROPEPhilippe Money, Horticulturist

FRESH FRUITS TRADERSFRESH FRUITS TRADERSFRESH FRUITS TRADERSRJA FOODS – UKAdam Pritchard, Managing DirectorPOMONA – FRANCEStephane Aubert, Purchasing DirectorKIBSONS INTERNATIONAL – INDIAHusainy Sharbat, CEOSWORLD – FRANCEEric Bommenel, CEO

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FOOD TRANSFORMATIONFOOD TRANSFORMATIONFOOD TRANSFORMATION

AMIR FACTORYCADGOLIVE OIL FACTORY (MAAH)NAJIB ZARABNAWAIRAHMAT FRUIT PROCESSING CORPSHAHRAMWAHDATNAZIF

AMIR FACTORYCADGOLIVE OIL FACTORY (MAAH)NAJIB ZARABNAWAIRAHMAT FRUIT PROCESSING CORPSHAHRAMWAHDATNAZIF

Project presentationInterviews of national players

MARKETSMARKETSMARKETS

HERATJALALABADKABULKANDAHARMAZAR-E-SHARIFKUNDUZCHARIKARMAIDAN-SHAR

QUETTAPESHAWARDUBAI

HERATJALALABADKABULKANDAHARMAZAR-E-SHARIFKUNDUZCHARIKARMAIDAN-SHAR

QUETTAPESHAWARDUBAI

TRANSPORTERSTRANSPORTERSTRANSPORTERS

ABDUL SABOORAES CARGOARIANAAZALBAKHTAR SPEEDYCHAHAR YARDHLGHARIB ABADPOSTQADERI GROUPSAIGHANTAHIM SAHIBAHMAD ZAI

ABDUL SABOORAES CARGOARIANAAZALBAKHTAR SPEEDYCHAHAR YARDHLGHARIB ABADPOSTQADERI GROUPSAIGHANTAHIM SAHIBAHMAD ZAI

INSTITUTIONSINSTITUTIONSINSTITUTIONS

MINISTRY OF COMMERCEMINISTRY OF FINANCE MINISTRY OF AGRICULTUREMINISTRY OF RURAL REHABILITATION DEVELOPMENTRAMP – CHEMONICSCHAMBERS OF COMMERCEACTED – AICC – AISA – AREU ERO – FAO – IF HOPEMADERA – MERCY CORPS -ROOTS FOR PEACEWFP - USAID

MINISTRY OF COMMERCEMINISTRY OF FINANCE MINISTRY OF AGRICULTUREMINISTRY OF RURAL REHABILITATION DEVELOPMENTRAMP – CHEMONICSCHAMBERS OF COMMERCEACTED – AICC – AISA – AREU ERO – FAO – IF HOPEMADERA – MERCY CORPS -ROOTS FOR PEACEWFP - USAID

One to one interviews were conducted with all kinds of actors of the value chain

IMPORTERSIMPORTERSIMPORTERS

AFGHAN EXPORTERSAFGHAN EXPORTERSAFGHAN EXPORTERS

CROSSING POINTHAJI KHAN SHEREENHASEEB FAYCALHILOUDISMAIL ZADEMOHAMMAD HAKIMMUJADIDY GROUPYOUNG GROUPSAFITEXSANJAR SOHEILSINAZIA, Etc..

IMPORTERSIMPORTERSIMPORTERS

AHMAD SHAH & AHMAD KHAR NOORDIN ZADAAZIZ JAMIL QALA E NAWIEZAT- E- AFGHAN RASUL FAIZEHAJI AKHTAR SABOOR SAMIRITFAQ DASTAGEER ZADEN SAMI ALI MAMINIMIRWAIS SHARIF HASSANMOHAMMAD AKBAR WAHEED JANMOHAMMAD YOUSSOUF ZIA MEHREMONAWAR Etc…

AHMAD SHAH & AHMAD KHAR NOORDIN ZADAAZIZ JAMIL QALA E NAWIEZAT- E- AFGHAN RASUL FAIZEHAJI AKHTAR SABOOR SAMIRITFAQ DASTAGEER ZADEN SAMI ALI MAMINIMIRWAIS SHARIF HASSANMOHAMMAD AKBAR WAHEED JANMOHAMMAD YOUSSOUF ZIA MEHREMONAWAR Etc…

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Agenda

Project Presentation

Global Market

Production and Marketing in Afghanistan

Short-Listing of Opportunities

Next Phase

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Global MarketWorld trade – Fruits and vegetables

Juices 5.5 Fresh

Fruits 19.5Processed

Fruits and Vegetables

19Fresh

Vegetables 13

The world trade value of horticulture products is estimated at US$ 57 billion

Processed products represent 40% of the trade

123 million tons exchanged in 2001, that is 10% of total volume (1)

World trade of horticulture products grew 3.3% a yearbetween 1990 and 2001

(1) AgMRC, April 2003Source: USDA, 1999-2001 averages

World trade value of horticulture products by category

in billion US$

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Global MarketWorld exports – Horticulture products

NAFTAEU

East-Asia

Southern Hemisphere Exporting Countries

Banana exporting countries

European Union

- 55% of imports

- 40% of exports

North America (NAFTA)

- 20% of imports

- 17% of exports

East Asia

- 12% of trade

Mostly intraregional trade take place (e.g. 60% of European trade)Interregional trades have increased but are limited to:

North/South off-season importsBanana trades

Little opportunity for export of horticulture products into the main markets

3 main trading

regions

75% of world trade

Middle-East

countries

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Global MarketDynamics of Western and East-Asian markets

Opportunities with East-Asia• East-Asia trades are

dominated by the exports from China to Japan

• China is by far the world’s number one producer of fruits and vegetables

• 72 million tons of fruits, representing 15% of global output(1)

• 300 million tons of vegetables, 43% of global output(2)

• China exports less than 1% of its production so far

• Chinese prices are highly competitive

(1) Rabobank, 200

(2) AgMRC, USDA 2001

Limitations to trade with Western Markets• Import opportunities to EU are more and more limited by preferential trade agreements and very high standards• For European fresh fruits buyers, cold chain and logistics optimization are the main key-factors.• The US favor intra-NAFTA trades. Yet they are not as restrictive as the EU towards extra-regional imports

Western Markets Opportunity• Products are purchased in large volumes• Main import opportunities lie in off-season products• Choice criteria of products:

• Appearance of the product is more important than its taste• For the fruit transformation industry, regularity of the flows

is the very first criteria• Organic is still marginal yet its share is increasing

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Opportunities with South-Asia (India, Pakistan)

• India is the 2nd world’s fruits and vegetables producer

• 40 million tons of fruits, representing 8% of global output(1)

• 72 million tons of vegetables, 10% of global output(1)

• India signed preferential trade agreements for most Afghanistan’s horticulture products in 2003, clearing customs taxes by 50 to 100%

• Pakistan is the main trade partner of Afghanistan for fresh produce

(1) USDA, 2000

Middle-East Markets Analysis• Imports to Middle-East are estimated at $1 Billion 1

• Dubai is the main trading hub for Middle-East and North- and East- African countries

• Afghan products find it hard to position themselves between high quality and more expensive US products and on the other end low cost products from Iran. Volumes of Afghan products are very low.

• Because of growing activity, new wholesale market with 434 outlets to open at Al Aweer in July 2004

• On-going improved quality controls programOpportunity for counter-season vegetables and temperate fruits

Global MarketDynamics of Middle-East and South-Asian markets

Afghan horticulture products can enter this market with improved quality

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Global MarketImport markets – Buyers requirements

“Quality is our first concern. WE commercialize the products. WE are the ones to take the risks” Mr F., Purchasing Manager of a world leading agribusiness group

“UK published a “black list of exporters” whose products were not conform” Pesticides Initiative Program Magazine

Major import markets tend to increase their quality standards, led by Europe’s strict regulation

EU main requirements– All EU food processors are required to

implement an HACCP (sanitary control) system

– EU is preparing a legislation requiring importing countries to have a quality control system similar to HACCP

– ISO 9002 (working methods) and Euregap (fresh fruits) in the first place, are major assets for the importers

Buyers requirements– To share responsibility, most EU

importers require their suppliers to get the same certifications as themselves

– Major firms audit the factories they are working with

– Accreditation process takes a couple of months (up to 3 years)

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Global MarketDried fruits and nuts

Annual world production for selected products in thousand tons

-500

1,0001,5002,0002,5003,0003,5004,0004,5005,000

Pine nutsDried apricots

Dried figsPistachios

RaisinsWalnut

AlmondsSources: USDA, FAO 2003

4 main producers (US, Iran, Turkey, China) account for two thirds of the productionWith estimated 91,000 tons out of 4.8 million tons, Afghanistan’s volume share of world production is about 2%, down from about 10% in the 70’s

Main Afghan products are almond, walnut, raisin and pistachioThe global export market for these products is estimated at $2.2 Billion for 1.3 million tonstraded yearly

Afghanistan could potentially be a significant player on the dried fruits market

Production shares of the selected products by cou ntry of origin

32%

15%

11% 7% 4%

3%

2%

2%

1%

21%31%

2%USIranTurkeyChinaSpainOther Middle EastAfghanistanItalyGreeceNorth AfricaOthers

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Global MarketOrganic products

Definition– Food grown without the use of synthetic chemicals

such as artificial fertilizers, pesticides, growth regulators

Organic labels– EU organic logo, California Organic Food Act 1990,

French AB, German Demeter…Drivers– Argument over GMOs– Environmental concerns– Health awareness (wellbeing)– Government and retailer support

Organic market values (US$ Million) 2000

8,000

2,128

986

985

978

1,887

USGermanyUKFranceItalyOther

OpportunitiesWestern countries20% growth forecast for the next few yearsConsumers may be willing to pay 20% more than conventional productsTraditional farming in Afghanistan is close to organic

ConstraintsCertification (quality control)Optimization of marketing channelsCompetition with developing countries, China and India in particularCompetition with local producers => need for logistic costs optimization

Organic food is a fast growing trend in western countries

Total: US$ 15 billion

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Global MarketFairtrade

DefinitionProducts guaranteeing fair and sustainable conditions for the producers and their environment.

Fairtrade labelE.g. Max Havelaar’s certification for a growing list of products

DriversConsumers accept to pay 5-15% more if the products are produced properlyGrowing interest for the concepts of sustainable developmentSupport of major retailers

OpportunitiesStrong growth in Western countriesMax Havelaar: sales of fruit juices grew 40% a year for the last 3 years(US$ 8 million revenue in 2003)Focus on small production unitsCertification for dried fruits and nuts under study by FLO (Fairtrade LabellingOrganization)Afghanistan brand in the context of reconstruction

ConstraintsCertification covers only some productsIntroducing new products take timeNeed for cooperative structuresEmerging market for dried fruits

Afghanistan can be positioned as a strong brand in Fairtrade marketfor juices and dried products

Coffee with Fairtrade label

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Opportunities

Open regional markets

Strong potential for dried fruits

Differentiation in quality products

Growing organic and fairtrademarkets

Import substitution

Constraints

Not part of a major trading region

No counter-season opportunity with major trading regions

Certification requirements to go to western markets

Global MarketPosition of Afghanistan in Global Markets

Afghanistan has a potential for selected crops but needs to specialize as it is not part of major trading regions

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Agenda

Project Presentation

Global Market

Production and Marketing in AfghanistanProduction conditions

Post-harvesting conditions

Value Chains

Internal Flow

Import/Exports

Short-Listing of Opportunities

Next Phase

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Production and Marketing What horticulture crops are Afghan farmers cultivating?

Grape 44%

Melon/Water melon (irrigated)

19%

Almond9%

Walnut2%

Mulberry 12%

Apricot 5%

Pomegranate2%Apple

5%

Peach1%

Plum1%

70%

FRUITS

30%

VEGETABLES

5 top fruits and vegetables represent ~ 90% of area cultivated

Relatively low horticulture crop diversification

Potato 52%

Onion 15%

Tomato 12%

Carrot 5%

Okra 4%

Cauliflower 1%

Spinach 1%

Turnip 3%

Eggplant 3%

Cucumber 3%

Others1%

Source: Analysis of FAO 1997 Agriculture survey and FAO2002-2003 Winter Agriculture Survey databases.

2.05 ha irrigated with first crop, 0.35 irrigated with second crop and 0.21 ha irrigated horticulture crops.

Horticulture crops represent 10% of total irrigated area

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Grape

0

20000

40000

60000

80000

1978 1996 2003H

ecta

res

Production and Marketing Production trends

Despite war, drought and global market consolidation,land allocated to fruit crops has slightly increased over the past 25 years

DECREASE SINCE 1978INCREASE SINCE 1978

Source: FAO, Landcover data, 1972 & 1993and analysis of FAO 1978 and 1996 Agriculture survey, and FAO 2002-2003 Winter Agriculture Survey

OVERALL SLIGHT INCREASE IN THE PAST 25

YEARS

Pomegranate

0

2000

4000

6000

8000

1978 1996 2003

Hec

tare

s

Apple

0

2000

4000

6000

8000

1978 1996 2003

Hec

tare

s

Apricot

040008000

120001600020000

1978 1996 2003

Hec

tare

s

Walnut

0

1000

2000

3000

4000

5000

1978 1996 2003

Hec

tare

s

Almond

0

4000

8000

12000

16000

20000

1978 1996 2003

Hec

tare

s

But a significant decrease since 1996 due to the

drought

Orchard

0

30000

60000

90000

120000

1972 1996 2003

Ha

All Orchard

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Production and Marketing Conditions of production

Low productivity and qualityTraditional/extensive production systemOnly few intensive commercial orchards

No uniformity of varietiesSome species are propagated without grafting –stone fruits, walnuts, some almondsOnly few commercial nurseries

Poor farming practicesExcessive irrigation (vineyards/pomefruitsorchards are flooded every 10-15 days)Lack of pruning (pomegranate in Kandahar) or incorrect pruning (apple in Wardak)Deep planting (burring rootstock) resulting in delayed bearingVine trained on the soil or on mud trellises resulting in high incidence of diseases and presence of dirt/dust Incorrect orchard floor management

No or poor pest (and virus) management

Production practices did not change over the past 25 years - Lack of know-how on horticulture commercial cultivation practices

Sari Pul, Sozma Qala, 16 May 2003

Herat, Injil 29 May 2003

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Production and Marketing Extensive production system

Almond trees

Apricot trees

Wheat intercropped

Ghorband River

Almond trees intercropped with wheat. Trees are damaged by the repeated passages of ox-plough which results in very low productivity

Most of the orchards are intercropped with cereal and have low productivity

Ghorband valley, 5 June 2003

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The few existing intensive production systems also have low productivity

Apple orchards un-pruned and showing excessive growth and little production as seedlings have been planted too deep (below

grafting point) and as a result trees are now on their own root

Wardak, Jeghatu district, June 1994

Production and Marketing Intensive production system

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Production and Marketing Yield comparison

9 to 11Turkey

8.50Afghanistan

4.14Pakistan

5.30Turk-Uzb-Taj

9.51Iran

11.19China

16.65United States of America

24.49India

Yield (Mt/Ha)Grapes

0.67Turk-Uzb-Taj

0.91Iran

1.40Afghanistan

2.11Turkey

2.20China

2.47Pakistan

3.46United States of America

Yield (Mt/Ha)Almond

14.10Afghanistan

14.67China

14.79Turk-Uzb-Taj

16.52Pakistan

18.49India

21.00Iran

25.99Turkey

41.15United States of America

Yield (Mt/Ha)Potatoes

23.14Turk-Uzb-Taj

9.83Pakistan

10.70Afghanistan

14.81India

25.61China

28.22Iran

40.11Turkey

65.90United States of America

Yield (Mt/Ha)Tomatoes

12.30Afghanistan

12.75India

13.14Turk-Uzb-Taj

20.90Iran

21.00Pakistan

28.76United States of America

30.36Turkey

32.90China

Mt/HaWatermelon

10.50Afghanistan

14.58India

17.70Pakistan

18.74China

19.58Turkey

24.78Turk-Uzb-Taj

25.00Iran

38.68United States of America

Yield (Mt/Ha)Carrots

Horticulture crop yields of Afghanistan are low but close to its neighbours

Source: www.fao.org

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COPYRIGHT 2004 - ALTAI CONSULTING, KABUL - AFGHANISTAN26

Production and Marketing Packaging and processing

Packaging/processing practices did not change over the past 25 years

Limited processing capacity

Raisins factories damaged or not maintained9 factories out of 27 constructed before the war are operationalEquipment and process is outdatedProcessing factories are often rented to traders (owners do not market themselves)

Olive oil factory in Jalalabad

Packaging in wooden crates of inappropriate size results in important losses of productsWooden crates are unfit for international exports (except Pakistan and India)No cold chain to transport fresh horticulture products

Reduced quality and important losses

Mazar-e Sharif, 1 June 2004

Mazar-e Sharif, 5 June 2004

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Production and Marketing Outdated processing plants

Afghanistan, Raisin processing plant, June 2004Turkey, Elbiscan laser sorting/scanning/

reinspection system

Raisin processing plants do not meet certificationrequirements for European markets

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Production and Marketing Products quality

APPEARANCE

Irregular size (no calibrating), color (diverse varieties except for grapes and apple) and maturity (fields harvested at once)

Dusty

Often bruised (packaging)

Often marked by pests and diseases (stone fruits sometimes have worms inside)

TASTE

Good in general but it varies from one fruit/vegetable to the other

Unpleasant surprises (bitter almonds in a lot of sweet almonds)

CONSERVATION

Short shelf life as fruits/vegetables are harvested at suboptimal time (potatoes are not defoliated before harvest, too late irrigation on onions, apple harvested too late and all at once, mechanical damages during packaging reduce conservation, etc..)

Inadequate storage practices (insufficient ventilation in stores)

Quality standards of Afghan horticulture products can improve

Mazar-e Sharif, 5 June 2004

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Production and Marketing Products quality – Food safety

Fruits and vegetables are washed or moistured with unsafe water (no water supply in the wholesale markets)

Presence of contaminants in urban dust found in horticulture products (open latrines in every city and wholesale markets have no facilities)

Most of horticulture products are produced without pesticides but when chemicals are used, there is no standard/control on residues

Raisin processing facilities are below international requirements in term of hygiene and food safety

Lack of personnel dealing with food safety issues

Food safety concern over Afghan horticulture products

Parwan, Ghorband, 4 June 2003

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Production and Marketing Marketing conditions – Mechanisms

The marketing sector is organized in fragmented vertical social networkswhich hamper optimization of market opportunities:

The rationales for wholesalers and traders to market horticulture products to one destination rather than another is largely determined by presence of solidarity networks (qawm) members

The fragmentation of the Afghan society hampers the establishment of contractual relations outside of social networks (qawm) between producers and traders for large volumes of good quality products

Social networks and free markets (open fairs) command the marketing environment

Horticulture products are sold in open fairs which promotes low prices rather quality:

Government has little influence on market prices and quality regulation

Wholesale markets are highly speculative and depends on daily available trade information such as number of buyers/sellers, trade agreements, etc…

Market days in districts are coordinated with market days in provinces which allows marketing of farmers products in remote area, but the number of intermediaries increases

Example volatility of market prices; Tomato price in Jalalabad wholesale market:22nd May 2004 = 50 Afs/seer23rd May 2004 = 90 Afs/seer24th May 2004 = 60 Afs/seer

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Production and Marketing Marketing conditions – Mechanisms

Wholesale markets work as open fairs but also through social networks

Early morning in the wholesale market of Jalalabad. Trucks from Pakistan have been ordered through Afghan trading partners in

Peshawar and products are sold to retailers on a open fair basis

Farmers negotiating sellingprices for their cucumbers

Retailers loading tomatoespurchased from traders

Jalalabad, 26 May 2004

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Production and Marketing Marketing conditions - Actors

Existing horticulture markets focus is on prices and not quality

BENCHMARK: WORLD MARKETS

Large retailer chains sometimes control 20 to 60% of the horticulture market of one country (e.g. Carrefour, Auchan, Migros)

Their focus is on quality:1. Food safety2. Appearance3. Taste

FROM FARMERS TO WHOLESALERS

Large number of actors from the production to the marketing which results in fierce competition on prices but do not promote quality:

There are approximately 1 million farms in Afghanistan out of which approximately 0.6 million farmers grow horticulture crops

There are more than 2,000 wholesalers for horticulture products. The wholesalers are located in the 5 main wholesale markets (Kabul, Kandahar, Mazar, Jalalabad and Herat) and smaller wholesale markets in the 34 provinces

There are several thousands middle men liaising the many farmers and wholesalers

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Production and Marketing Marketing conditions - Actors

Quality grading is done by retailers at the very end of the marketing chain

RETAILERS

The number of retailers is unknown but amounts to several thousand people

Producers and retailers do not know each other

Retailers for fresh products have no facilities and often sell their products on hand pulled carts

Retailers have an important share of the value chain (~ 10 %) as sorting products by quality is done at their level (last level of the marketing chain) and they bear the risks of spoiled unsold products

Parwan, Charikar, 25 June 2004

BENCHMARK: WORLD MARKETS

Large retailers have direct contractual agreements with producers, which establishes quality requirements for horticulture products

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COPYRIGHT 2004 - ALTAI CONSULTING, KABUL - AFGHANISTAN34

Production and Marketing Marketing conditions - Actors

ACTORS STRATEGY

In the past decades, the strategy adopted by actors at all level of the horticulture

sector was to limit risks through the choice of temporary solutions

(extensive intercropped orchards, focus on price instead of quality, interest in short

term trade opportunities, limited investment in factories, etc… )

The current environment is more conducive to private investment for large

processing facilities

TRADERS

Limited number of operating importers and exporters:

The import/export traders are located in the 5 major cities (Kabul, Herat, Mazar-e Sharif, Kandahar and Jalalabad) in which local powers influence trading environment

Lack of information on foreign markets (world wide prices, quality requirements, contract)

Lack of communication facilities until recently

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Production and Marketing Marketing chains – 4 types of products

Trading Partner in Pakistan

Fresh products –

Long and medium shelf life

Fresh products –

Short shelf life

Dried Fruits Nuts and wild Nuts

Onion, Potato, Carrot, Grape, Apple, melon

Stone fruit, tomato, okra egg-plants

Farmers sells their crop in the field (sometime

in advance)

Retailers

Farmers bring products in the

wholesale market during harvest

Commission Agent

Retailers

Sun dried, green and black raisin,

apricot, fig

Farmers bring products in the

wholesale market when required

Wholesaler

Trader

Raisin processing/

cleaning company

Trading Partner in foreign country

Retailers

Almond, walnut and pistachio,

pine nut

Farmers sell to Middle men in

the villages

Wholesaler

Trader Retailers

Trading Partner in foreign country

Trader Middlemen

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350

5010 25

50

485

0

100

200

300

400

500

Product(farmgate price)

Packaging Transportation Wholesalermargin

Retailer margin Final sales price

Production and MarketingValue chain – Grape

Example: Shamali grape in Kabul (retail)US$ / ton

The value chain of grape shows a number of Afghan actors with low added value

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Production and MarketingValue chain - Grape

0

200

400

600

800

1000

Price (US$/ton)

Shamali Grape toKabul

Shamali Grape toPeshawar

Shamali Grape toDubai

Retailer MarginForeign Partner MarginWholesaler MarginTransportPackagingProduct

When comparing the value chain of Shomali grapes across several markets (Kabul, Peshawar, Dubai), it is easy to notice the influence of logistics on the price of exported fruits

Logistic costs represent approximately 125% of the farm-gate price when exported to Dubai

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COPYRIGHT 2004 - ALTAI CONSULTING, KABUL - AFGHANISTAN38

930

6055

15030252010

580

0

200

400

600

800

Produ

ct (fa

rmgate

price)

Transp

ortatio

nMiddle

man

Factory

Trader

Transp

ortatio

n to R

ussia

Partner

fee in

Russ

iaWholes

aler m

argin

Wholesale

price i

n Russ

ia

Production and MarketingValue chain – Raisin

Raisin processing adds relatively small value,but makes logistics less of an issue

Example: sun-dried Shamali raisin processed in Kabul and exported to Russia US$ / ton

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Production and MarketingValue chain – Fresh tomato vs. tomato paste

Total:US$ 390 / ton

Total:US$ 910 / ton

The value chain of processed tomatoes in Pakistan shows high value added

300

90

210

263

175

263

Fresh Tomato(Kabul)

Processed tomato(Lahore)

Fresh and Processed ProductsValue Chain (in US$ per ton)

DistributionProcessor's marginProcessProduct

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COPYRIGHT 2004 - ALTAI CONSULTING, KABUL - AFGHANISTAN40

# #

#

#

%

=

= = ==

=

#

#

##

#

#

#

#

Mery

Quetta

Meshed

Zahedan

Bukhara Dushanbe

PeshawarIslamabad

Kandahar

Mazari Sharif

JalalabadKABUL

Hirat

Trading Road Map

N

EW

S

100 0 100 200 Kilometers

# Main Trading Centers% Kabul

# Cities Neighbouring Afghanistan

Secondary Road to International BordersRing-road & Tarmac Road

= Major Road Passes

Legend

Source: AIMS vectors adapted by ALTAI

To Lahore/India

To Karachi

To Lahore/India

To B

anda

r Cha

baha

r

To Teheran

To Bandar Abbas

To Askhabad

To Russia

To C

hina

Islam Qala

Turghundi

Aqeena HairatanSherkhan

Ai Khanum

Ishkashim

Turkham

Spin BoldakZerenj

Production and Marketing

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West

South-West

North

South

North-East

EastWest-Central

Production and Marketing Horticulture products trade routes

Trade between Wholesale Centers and ProvincesTrade between Main Wholesale Centers

International Trade

KABUL

~ 1,600 Wholesalers0.5 to 1 Million MT Trade

JALALABAD

~ 70 Wholesalers0.02 Million MT Trade

MAZAR-E SHARIF

~ 260 Wholesalers0.2 to 0.3 Million MT Trade

HERAT

~ 240 Wholesalers0.1 to 0.2 Million MT Trade

5 trading centers and main wholesale markets – Kabul is the main hub

KANDAHAR

~ 300 Wholesalers0.2 to 0.3 Million MT Trade

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Production and Marketing Import / Export – Fresh fruits

West

South-West

North

South

North-East

EastWest-Central Export : ~ 50,000 MT

Import : ~ 3,000 MTImport : 10,000 MT

Grape, Apple,

Melon, Apricot,

Pomegranate

Watermelon,

Apple & Stone

fruits

Pakistan is the main trading partner for fresh fruits (temperate fruits exports)

Apple

Source: Information gathered at the custom office of each border pointsImports/export data from Hamal 2003 to Hut 2004

Grape, Melon,

Pomegranate

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Production and Marketing Import / Export – Fresh vegetables

West

South-West

North

South

North-East

EastWest-Central

Export : 66,000 MT

Import : 74,000 MT

Import : 12,000 MT

Expo

rt :

~ 3,

000

MT

Import : ~9,000 M

T

Export : 200 MT

Potato &

Onion

Onion, Potato

& Tomato

Potato, Onion

& Tomato

Potato

& Onion

Pakistan is the main trading partner for fresh fruits (counter-season trading)

COLD STORAGE

There is no large cold storage in Pakistan for re-export of vegetables in Afghanistan

Afghanistan and Pakistan benefit from mutual counter-season market opportunities

Potato, Onion,Tomato

Potato

Source: Information gathered at the custom office of each border pointsImports/export data from Hamal 2003 to Hut 2004

Onion, Potato

& Tomato

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Production and Marketing Import / Export – Dried fruits and nuts

West

South-West

North

South

North-East

EastWest-Central

Export : ~15,000 MT (transit in Iran)Export : ~ 7,000 MT

Expo

rt :

~ 9,

000

MT

Export : ~5,500 MT

Import : ~100 MT

Export : ~1,000 MT

Import : ~ 100 MT

Raisin, Dried Apricot

& Cherry

Raisin

Raisin

Raisin, Pistachio,Almond, Walnut

Rai

sin

Afghanistan exports dried fruits through CIS countries, Iran and Pakistanto markets in Russian, India and the Middle East

Source: Information gathered at the custom office of each border pointsImports/export data from Hamal 2003 to Hut 2004

Raisin, Dried Apricot

& Almond

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Production and Marketing Import / Export – Processed products

West

South-West

North

South

North-East

EastWest-Central

Import : 30,000 MT

Export : ~ 1,000 MT

Import : ~ 12,000 MT

Import : ~3,000 MT

Import : ~100 M

T

Import : ~ 100 MT

Fruit juices Iranian TomatoSauce

Iranian Fruit juices& Tomato Sauce

Iranian Fruit juices

& Tomato Sauce

Fruit juices

Afghanistan imports all processed products from Iran and Pakistan

Source: Information gathered at the custom office of each border pointsImports/export data from Hamal 2003 to Hut 2004

Fruit juices

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Production and MarketingExport channels

Sea freight Rail transportationRoad transportation Air transportation

Air transportation:

Dubai : US$ 350 / ton

Frankfurt : US$ 1,000 / ton

Moscow : US$ 1,000 / ton

Non-air transportation:

Dubai : US$ 100 / ton – 10 days

Moscow : US$ 140 to 200 / ton – 20 days

Karachi : US$ 100 to 150 / ton – 4 weeks

Due to its landlocked situation,

logistics is a main hurdle for Afghan exports and horticultural markets

DUBAI KARACHI

BANDAR ABBAS

TO MOSCOW

TO FRANKFURT

KABUL

TERMEZ

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Production and MarketingLogistics (Road transportation)

Less than 50 refrigerated trucks are available around the countryUp to 200% price differences on prices applied by various transportersAbsence of insurance systemDifficulty to optimize return tripsRoad transportation costs are higher than Europe’s despite lower labor and oil costs

Afghanistan faces severe road transportation costs

Average national transportation cost comparison for 1 ton and 1 km

Europe Afghanistan

$ 0.04 - 0.05

$ 0.05 - 0.10

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Production and MarketingLogistics (Air transportation)

Ariana Afghan Airlines is the cheapest alternative (US$ 350 a ton to Dubai)The level of quality of service offered by Ariana is unadapted to fresh fruits transportation:

Poor storage and sanitary conditionsCancellations and delays

Cargo companies using DHL flights and Azal offer better quality of service. Yet the prices are prohibitive for fruits and vegetables

Azal: Kabul – Dubai $2000 / tonKabul – Moscow: $1850 / ton

Air transportation does not offer satisfying costs and sanitary conditions

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Production and Marketing Key findings

The horticulture sector did not improve but did not collapse in the past 25 years

Given its climatic potential for horticulture, Afghanistan has an under-developed horticulture sector

The sector is gripped by structural constraints from production to marketing of the products

All actors in the marketing chain of horticulture products have adopted strategies to limit risks in the past decade

Logistic constraints in a landlocked country

Political insecurity is a major threat to changes

Ways to develop the horticulture sector through the private sector:

Wealthier farmers/land owners are in the best position to take investment risks in intensive horticulture crops –commercial orchards

Potential Afghan investors may need to have sufficient control over the whole marketing chain:

production (commercial crops)

processing (industrial plants)

distribution (marketing networks)

Risks have to be shared with public funds due to the lack of infrastructure

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Agenda

Project Presentation

Global Market

Production and Marketing in Afghanistan

Short-Listing of Opportunities

Next Phase

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Short-Listing of Opportunities Population and GDP trends

Population Trends Afghanistan

15

22

14

0

5

10

15

20

25

1978 1990 2002

Mill

ion

Inha

bita

nts

Population Trends Pakistan - India

76 111 150

661

846

1'050

0

200

400

600

800

1'000

1'200

1978 1990 2002

Mill

ion

inha

bita

nts

Demand for horticulture products is driven by increased population in the past 25 years and recent GDP increase per inhabitants

Nearly half a billion population increase in India and Pakistan over the past 25 years

8 millions population increase over the past 25 years in Afghanistan

Kabul, 31 December 2003

AFGHANISTAN : 20% GDP increase in 1383/2003 (174 $/inhabitant)

Paki

stan

Indi

a

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Short-Listing of OpportunitiesCriteria for selection of opportunities

• Market size

• Price opportunities

• Quality requirements

• Crop calendar

• Logistic constraints

• Volume of existing production

• Potential Analysis of Afghanistan Regions

CRITERIA

Production Value in Million US$

Marketability

Comparative advantages of Afghanistan regions

OUTPUT

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AFGHANISTAN

Price 350 $/MT

Short-Listing of Opportunities Example: Grape

IRAN

2.53 Million MTPrice: 300-450 $/MT

Export: Yes

PAKISTAN

0.05 Million MTPrice: 483 $/MT

Export: No

INDIA

1.2 Million MTPrice: 176 $/MT

Export: YesUS

6.1 Million MTPrice: 447 $/MT

Export: Yes

TURK-UZB-TAJ

0.8 Million MTPrice: 176 $/MT

Exports: YesCHINA

No Data MTPrice: 223 $/MT

Export: Yes

TURKEY

3.85 Million MTPrice: 250 $/MT

Export: Yes

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COPYRIGHT 2004 - ALTAI CONSULTING, KABUL - AFGHANISTAN54

AFGHANISTAN

Price 550 $/MT

Short-Listing of Opportunities Example: Walnut

IRAN

160,000 MTPrice: 1200 $/MT

Export: Yes

PAKISTAN

20,000 MTPrice: 810 $/MT

Export: No

INDIA

31,000 MTPrice: 380 $/MT

Export: Yes

TURKM-UZBEK-TAJIK

5,000 MTPrice: 1500 $/MT

Export: YesTURKEY

125,000 MTPrice: 1100 $/MT

Export: No

US

295,000 MTPrice: 1100 $/MT

Export: Yes

CHINA

360,000 MTPrice: 720 $/MT

Export: Yes

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COPYRIGHT 2004 - ALTAI CONSULTING, KABUL - AFGHANISTAN55

AFGHANISTAN

Price 250 $/MT

Short-Listing of Opportunities Example: Tomato

IRAN

3 Million MTPrice: 345 $/MT

Export: Yes

PAKISTAN

0.3 Million MTPrice: 210 $/MT

Export: No

INDIA

7.4 Million MTPrice: 165 $/MT

Export: Yes

TURKM-UZBEK-TAJIK

1.4 Million MTPrice: 490 $/MT

Export: YesTURKEY

9 Million MTPrice: 195 $/MT

Export: Yes

US

12 Million MTPrice: 670 $/MT

Export: Yes

CHINA

25 Million MTPrice: 90 $/MT

Export: Yes

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Short-Listing of OpportunitiesExample: Crop calendar - Onion

Month Dalwa Hut Hamal Saur Jawza Saratan Asad Sunbula Mizan Aqrab Qaus JadiJan Feb 21st Mar Apr May Jun Jul Aug Sept Oct Nov Dec

KABULHELMANDJALALABAD

NORTHERN AFGHPAKISTAN

Afs/seer 60 40 50 50 60

KABULJALALABAD

PAKISTAN

Afs/seer 55-60 40 50 50 55-60

BAGHLANNAHRIN

JALALABADPAKISTAN

UZBEKISTAN

Afs/seer 30 50-60 50-60 20 25-30

MA

ZA

RK

AB

UL

JAL

Production peak in PakLow Prices

Low Production in PakPrices Increase

Rem

ote

Mar

ket

Mar

kets

inte

grat

ed w

ith P

akis

tan

Low Production in PakHigher Prices

Opportunity for improvement of storage facilities

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Short-Listing of OpportunitiesExample: Crop calendar - Tomato

Month Dalwa Hut Hamal Saur Jawza Saratan Asad Sunbula Mizan Aqrab Qaus JadiJan Feb 21st Mar Apr May Jun Jul Aug Sept Oct Nov Dec

KABULJALALABAD

MAZARPAKISTAN

Afs/seer 130 90 50 30 70

JALALABADKABUL

PAKISTAN

Afs/seer 120 80 40 40 80 100

MAZARKABUL

PAKISTAN

Afs/seer 300 300 280 50 150 150

KA

BU

LJA

LM

AZ

AR

Production peak in PakLow Prices

Low Production in PakPrices Increase

Low Prices when Afghanistanstarts producing

Rem

ote

Mar

ket

Mar

kets

inte

grat

edw

ith P

akis

tan

Opportunity for plastic tunnels to extend productionperiod at the end of the season

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Short-Listing of OpportunitiesExample: Crop calendar - Apple

Month Dalwa Hut Hamal Saur Jawza Saratan Asad Sunbula Miza Aqrab Qaus JadiJan Feb 21st Mar Apr May Jun Jul Aug Sept Oct Nov Dec

WARDAKLOGAR

PAKISTAN

Afs/seer 170 200 150 150 150 160

WARDAKPAKISTAN

Afs/seer 200 200 150 150 150 160

MAZAR MAZARWARDAK

PAKISTAN

Afs/seer 320 300 210 210 280

KA

BU

LJA

LM

AZ

ARApple imported from cold storage

In Pakistan (mainly Quetta)

Prices decrease as apple quality deterioratesin late spring

Opportunity for establishing cold storage facilities

Rem

ote

Mar

ket

Mar

kets

inte

grat

edw

ith P

akis

tan

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US, EU and Russia Markets

Grapes

Sundried Kishmish

Green Kishmish

Almond

Apricot

Melon/w-melon

OnionTomato

Carrot

Pistachio

Peach

Walnut

PotatoApple

Okra

Pomegranate

Plum

0

50

100

0 60 120

Production Value Million US$

Mar

keta

bilit

yShort-Listing of OpportunitiesGlobal markets - Western markets

Increased quantity of dried fruits/nuts exports:Improve quality of raw material, processing and marketing (trading links need to be developed)

Challenges:Quality, certification, traceabilityCompetitors such as Turkey and IranBorder contraints

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Middle East Markets

Grapes

Sundried Kishmish

Green Kishmish

Almond

Apricot

Melon/w-melonOnion

Tomato

Carrot

Pistachio

Peach

Walnut

Potato

Apple

Okra

Pomegranate

Plum

0

50

100

0 60 120

Production Value Million US$

Mar

keta

bilit

y

Increase quantity of dried fruits and some fresh products::Improve processing and marketing (trading links needs

to be developed)

Challenges:Competitors such as Turkey and Iran

Short-Listing of OpportunitiesRegional markets – Middle East

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Pakistan & India Markets

Grapes

Sundried Kishmish

Green Kishmish

AlmondApricot

Melon/w-melon

OnionTomato

Carrot

Pistachio

Peach

WalnutPotato

Apple

Okra

Pomegranate

Plum

0

50

100

0 60 120

Production Value Million US$

Mar

keta

bilit

yShort-Listing of OpportunitiesRegional markets – Pakistan & India

Optimization of regional exchange for a cluster of products:Counter-season vegetable productsExcellency in temperate climate fruits

Challenges:Logistic for India (cold chain, road, border formalities)Maintaining trading relation with both partners

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Afghanistan Markets

GrapesSundried KishmishGreen Kishmish

Almond

Apricot

Melon/w-melon

Onion

Tomato

Carrot

Pistachio

Peach

Walnut

Blood orange

PersimonPotato

Apple

Okra

Pomegranate

Plum

0

50

100

0 60 120

Production Value Million US$

Mar

keta

bilit

yShort-Listing of OpportunitiesLocal market – Afghanistan

Increase availability on local market: Consolidation of the retail sectorExtension of production period (new varieties, plastic tunnels)Substitution to import for stone fruits, oranges, persimmonsImprove storage capacity

Challenges:SecurityPolitical economy

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Short-Listing of OpportunitiesProcessed products

Processed products are a sizeable import market

Processed fruits and vegetables represent around 1.4 to 2.5 billionAfghani (US$ 28-60 million) market (estimation)Juices and tomato paste are the biggest share (75% of trade)

No food processing industry in Afghanistan todayMost processed products are imported from neighboring countries (Pakistan, Iran)

Market size of selected transformed products in Afghanistan in Million Afs

Juices Tomatopaste

Jams Pickles Potatochips

800-1200

400-800

200-40030-100 20-60

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Short-Listing of OpportunitiesShort-list

GLOBAL MARKET

REGIONAL AND LOCAL

Dried Fruits and Nuts

Fresh Products

Processed Products

Marketing Improvement

1. Raisins and apricot processing and packaging

3. Commercial horticulture crops for stone fruits, pomegranate, blood orange, persimmon, walnuts

4. Storage facilities for temperate fruits and vegetables (apple, grape, tomato)

6. Processing plants for fruits juices, fruits concentrates, tomato sauce and potato chips

7. Commercial horticulture crops for processed products (juices, …)

9. Consolidation of the retail sector (through the establishment of super markets)

8. Plastic/carton plant for production of boxes for fruits packaging

5. Plastic tunnels to extend availability of vegetable (tomato, cucumber, okra …)

2. Fair trade and Organic

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Short-Listing of OpportunitiesQuality products - Sundried raisins

About 560,000 tons of sundried raisins are traded yearly (estimate)Most sundried raisins are exported to western countries to be used in the baking industry (80% of use in Europe)“More than taste, our first concern is the cleanliness of the raisin”, Alexis Sumar, Voiceval’s CEO“ 99.9% of the raisins come from Turkey (…) Their plants are equipped with Elbiscanlasers. “There will be no purchases from Afghanistan is there is no quality AND price advantage”, Purchasing Manager of a leading international agribusiness group

Raisin export volume shares in 2001

33%

18%

16% 9%

6%

5%

4%

3%

18%

6%

TurkeyIranUSWestern EuropChileAfghanistanSouth AfricaGreeceOthers

Raisin import volume shares 2001

18%

12%9%

8%

6%4%4%

39% United Kingdom GermanyRussia NetherlandsCanada France ItalyOthers

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Short-Listing of OpportunitiesQuality products – Dried fruits processing factory

OpportunitiesPossibility of vertical control of the product chainModern plants at accessible prices are now available to target global marketsInvestments on existing factoriesGrowing organic and fairtrade marketsAfghanistan as a brand

ConstraintsVolume/Price driven marketsRussia tempted to move towards higher quality standardsThreats of Uzbekistan and Tadjikistan(exports multiplied by 4 since 1997)Certification requirements for western markets

StrengthsVariety potentialExisting sizeable productionIdeal climatic conditions for drying

WeaknessesAfghan raisins needs 2 to 3 washingsProduction techniques not satisfying, high investment needed to match competition/requirementsOutdated processing facilitiesKnow-how is mostly geared toward the Russian market

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Short-Listing of OpportunitiesCommercial crops

Strengths

Accessible to medium and large farmers/land lords

Afghans are habile farmers

Farmers are interested in diversifying their crop

Regulate supply of horticultural products

Weaknesses

No research in-situ in commercial horticulture crops

Lack of cultivation practices knowledge for commercial crops

Identification of interested farmers ready to take risks

Fragmented market distribution chains

Opportunities

Increase productivity

IF Hope in Jalalabad produces 2 million fruit trees seedlings for which commercial crops could be established

Experience and research applicable in neighboring countries (Iran, Pakistan, CIS countries) and other dry countries

Constraints

Security

Irrigation water insecurity (drought)

Speculative market

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Strengths

Accessible to small farmers (vulnerable population groups)

Not expensive to establish

Seasonality of horticulture products

Weaknesses

Availability of good quality material is uncertain

Identification of interested farmers ready to take risks

Opportunities

Increase of vegetable prices at the end of the growing season

Experience in Vietnam

Constraints

Security

Early and late frost

Speculative market

Short-Listing of OpportunitiesPlastic tunnels

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Short-Listing of OpportunitiesFruit juice market

Fruit juices are a growing mass-market product in Afghanistan

Iranian Fruit juices

Sodas

Water

Cool box for fresh drinks

Ice

Mazar-e Sharif, 6 June 2004

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Short-Listing of OpportunitiesProcessed horticulture products - Juices

The market of fruits juices in Afghanistan is estimated at between 800 and 1,200 Million Afsfor around 30-45 Million Liters with a yearly growth of around 15%

Currently, all the fruit juices of Afghanistan are imported. Mainly from Iran (47%), Pakistan (41%), UAE (8%), Uzbekistan and Turkey

At least 27 brands are present on the Afghan market. 6 of them hold 80% of the market

The increasing fruit juices market offers high opportunities for Afghanistan

OpportunitiesLocal interest for juices Growth potential with income per capita, urban population and consumption trends Potential advantage for a national brandRegional demand for fruits concentratesPossibility to combine investment with a bottling factory

ConstraintsIncreasingly competitive market between brands available in AfghanistanIran is positioned in selling pomegranate, grape and apricot concentratesVery competitive prices of fruits in Pakistan where processing is locatedNeed reliable supply from commercial orchards

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Short-Listing of OpportunitiesProcessed horticulture products – Tomato

Tomato paste, sauce, ketchupThe market of processed tomato in Afghanistan is estimated at 400 to 800 million AfsCurrently most products are imported from Iran (and Pakistan to a lesser extent)

Tomato processing is another opportunity to explore

OpportunitiesGrowing demandValuable use of varieties of tomatoes that are not suitable for transports

ConstraintsLow quality, price competitiveness of current productionRaw material is cheaper in neighboring countries (e.g. tomatoes are about 20% cheaper in Pakistan than Afghanistan)Little opportunity for export

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Strengths

Plastic/carton Industry uses well known technology

Increase quality and hygiene of horticulture product

Weaknesses

Arguably less environment friendly than wooden crates

New industry in the country

Opportunities

Increased demand for strong and clean packaging implements with the sophistication of horticulture markets

Facilitates access for Afghan horticultural product to foreign/international markets

Reduce losses of horticultural products

Demand for storage boxes for non-horticultural products traded in the market and at home

Experiences in other countries

Constraints

Security is a challenge for the establishment of a factory

Electricity supply

Acceptability of new packages to traders in Afghanistan and abroad

Short-Listing of OpportunitiesPlastic/carton industry for fruit packaging

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Short-Listing of OpportunitiesConsolidation of the retail sector

Strengths

Scale economy (price) and stronger bargaining power with producers/importers

Attract consumers with better quality products at low prices

Contractual agreements between farmers and retailers which allows focus on quality

Comparatively lower risks for investor than high tech processing plants

Weaknesses

Conflicts with retailers and importers -Losses of income for thousands of retailers

Lack of existing facilities (cold chain, logistic)

Opportunities

Sophisticated competition does not exist yet

Increasing urban population and GDP

Experiences in other countries

Shopping centers being constructed in various parts of the country

Constraints

Security is a challenge for changes in the marketing sector

Reliability of the supply chain

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Agenda

Project Presentation

Global Market

Production and Marketing in Afghanistan

Short-Listing of Opportunities

Next Phase

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Feasibility study and business plansShort-list

GLOBAL MARKET

REGIONAL AND LOCAL

Dried Fruits and Nuts

Fresh Products

Processed Products

Marketing Improvement

1. Raisins and apricot processing and packaging

3. Commercial horticulture crops for stone fruits, pomegranate, blood orange, persimmon, walnuts

4. Storage facilities for temperate fruits and vegetables (apple, grape, tomato)

6. Processing plants for fruits juices, fruits concentrates, tomato sauce and potato chips

7. Commercial horticulture crops for processed products (juices, …)

9. Consolidation of the retail sector (through the establishment of super markets)

8. Plastic/carton plant for production of boxes for fruits packaging

5. Plastic tunnels to extend availability of vegetable (tomato, cucumber, oka …)

2. Fair trade and Organic

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COPYRIGHT 2004 - ALTAI CONSULTING, KABUL - AFGHANISTAN76

Rodolphe Baudeau, Altai Consulting, Director, [email protected]

Raphy Favre, Horticulturist, [email protected]

Hakara Tea, Consultant, [email protected]

Mathieu Beley, Consultant, [email protected]

Violaine Mercier, Agronomist, [email protected]

ContactsAuthors

For further information, please contact: