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MARKET
FEASIBILITY STUDY Taifi variety of table grape
ABSTRACT Grapes is productive horticultural crops of Afghanistan due to large area of plantation and the high value received from which is approximately 44% of the horticulture production of Afghanistan belong to grape and its processed production such as raisin. Feroz Nakhchir district is one of the main Taifi grape producer in North zone of Afghanistan which is exporting high volume of this variety to Pakistan but…..
Tanin Consulting Service Company final report 1 Dec 2016
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Contents
1. Project Background................................................................................................................................ 6
2. Executive Summary ............................................................................................................................... 7
3. Methodology approach of the study ..................................................................................................... 9
3.1. Data collection and field works: .................................................................................................... 9
3.2. Project Data Entry and Analysis .................................................................................................. 12
3.3. Feasibility study diagram ............................................................................................................ 13
4. Location Description: ........................................................................................................................... 13
4.1. Province profile: .......................................................................................................................... 13
4.2. District profile: ............................................................................................................................ 14
5. Grape industry outlook ........................................................................................................................ 15
5.1. World grapes production industry: ............................................................................................. 15
5.1.1. World top producers of table grape ....................................................................................... 15
5.1.2. World consumption of fresh table grape ................................................................................ 16
5.2. Afghanistan grape production .................................................................................................... 17
5.2.1. Vineyard yield of Afghanistan versus other regional countries .............................................. 18
6. Technical Feasibility ............................................................................................................................. 19
6.1. Description of the product .......................................................................................................... 20
6.1.1. Grape varieties in Feroz Nakhchir district ............................................................................... 20
6.2. Grape production at Feroz Nakhchir district .............................................................................. 21
6.2.1. Grape production activities at Feroz Nakhchir district ........................................................... 23
6.2.2. Pest and insect control ............................................................................................................ 24
6.2.2.1. What good practice is in Chemical Use and Storage on the Farm? .................................... 25
6.3. Harvesting ................................................................................................................................... 27
6.3.1. Harvesting calendar ................................................................................................................ 28
6.3.2. Picking ..................................................................................................................................... 28
6.3.3. Sorting and packaging ............................................................................................................. 28
6.3.4. Labeling ................................................................................................................................... 31
6.3.5. What good practice is in harvesting? ...................................................................................... 32
6.3.6. What packaging and packing standards is to use for export quality? .................................... 33
6.4. Post harvesting and technology requirement ............................................................................ 35
6.4.1. Current available transportation system to export Feroz Nakhchir Taifi grape ..................... 36
Ariana Air line: ..................................................................................................................................... 36
Kam Air: ............................................................................................................................................... 37
6.4.2. What transportation system have to use for grape product? ................................................ 37
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6.4.3. Cold storages ........................................................................................................................... 39
6.4.3.1. What cold storage mechanism have to use for grapes? ..................................................... 40
6.5. Technical feasibility conclusion (Is Taifi grapes technically feasible to export in abroad market except of Pakistan?) ................................................................................................................................ 42
7. Financial feasibility .............................................................................................................................. 44
7.1. Production cost of Feroz Nakhchir grape.................................................................................... 44
7.2. Direct and indirect cost of the export grape in Afghanistan side ............................................... 45
7.3. Total cost of goods sold in Afghanistan side ............................................................................... 45
7.4. Transportation cost to India, UAE and china .............................................................................. 46
7.5. Cost of goods sold to reach in Indian market ............................................................................. 46
7.6. Cost of goods sold to reach in UAE market................................................................................. 46
7.7. Cost of goods sold to reach in China market .............................................................................. 46
8. Human Resource Feasibility ................................................................................................................ 47
8.1. Group farmers and other farmer's firm at the district ............................................................... 47
8.2. Specific skills, expertise, and certification required and availability of such personnel ............. 48
9. Market Feasibility ................................................................................................................................ 50
9.1. Market channel ........................................................................................................................... 51
9.2. Certification and license.............................................................................................................. 51
9.3. Domestic market ......................................................................................................................... 53
9.4. Abroad market ............................................................................................................................ 53
9.4.1. Pakistan Market (current abroad market analysis) ................................................................ 54
9.4.2. Other regional Market ............................................................................................................ 56
9.4.3. Matrix of analysis for regional market .................................................................................... 57
9.4.4. Deep investigation and further research in selected abroad market ..................................... 63
9.4.4.1. India..................................................................................................................................... 63
9.4.4.2. United Arab Emirate ........................................................................................................... 67
9.4.4.3. China ................................................................................................................................... 71
10. Conclusion and recommendation: .................................................................................................. 76
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Table of tables 3-1: Project data organizing table………….......................………….......................…………............. 11 4.1: Size of Grape vineyards lands…………………………..………….......................…………................... 14 5.1: World fresh table grape producers…………………..………….......................………….................. 16 5.2: Vineyard yield of Afghanistan and other regional countries in 2004…………........................ 18 5.3: Vineyard yield of Afghanistan and other regional countries……………………………………………… 18 5.4: Vineyard yield of Afghanistan comparison with Samangan province……………………………..... 18 6.1: Taifi and Hussaini cultivation in percentage………….......................………….......................... 20 6.2: Percentage of farmer's familiarity with other processing products from Grapes at the district………….......................………….......................………….......................………….....................
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6.3: number of grape vines variety at one Jerib………….......................…………............................ 22 6.4: Taifi and Hussaini productivity per vine……………………………………………………..…………............. 23 6.5: Current production activities at the district………….......................…………........................... 24 6.6: Maximum residue levels for chemical use in grape production…………................................ 25 6.7: Harvesting calendar………….......................………….......................…………............................ 28 6.8: Current packages used in the district………….......................………….......................…………… 28 6.9: Sample of grape packing in abroad regional market………….......................………….............. 31 6.10: Ariana cargo facilities and cost………….......................………….......................………….......... 37 6.11: Table 6.11: Kam Air cargo facilities and cost………….......................…………........................ 37 6.12: technical feasibility conclusion table………….......................………….......................…………. 43 7.1: production cost of Taifi grape at Feroz Nakhchir district………….......................…………........ 45 8.1: Percentage of Farmers’ membership in grape association…………........................................ 48 8.2: skill and knowledge requirement by grape value chain actors………….................................. 49 9.1: .How usually payments done to the farmers? ………….......................…………....................... 51 9.2: Cost of goods sold of Feroz Nakhchir grape per Kg at Pakistan market (Peshawar) 2015…… 55 9.3: Current export market of Afghanistan grapes’ share in the region…………........................... 56 9.4: Total values of exporting grape to abroad market (2013-2015) …………............................... 57 9.5: New delhi seedless grape variety wholesale price………….......................…………................. 64 9.6: New delhi seeded grape variety wholesale price………….......................…………................... 65 9.7: some fruit importer at new Delhi market………….......................………….............................. 66 9.8: UAE grape market price………….......................………….......................…………...................... 68 Table 9.9: china grape varieties wholesale market price………….................................................. 72
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Table of pictures and figures 3.1: Feroz Nakhchir grape value chain……………………………………………………………………………….......... 9 3.2: Feasibility Study Diagram………………………………………………………………………………....................... 13 4.1: Districts of Samangan province…………………………………………………………………………………………… 14 5.1: World fresh table grape producers………………………………………………………….………………………….. 15 5.2: Total World consumption of table grapes ………………………………………………………………………….. 16 5.3: Total World consumption of table grapes…………………………………………………………………………… 17 5.4: vineyard yield production of Afghanistan comparison with Samangan province (2015)……… 18 6.1: Technical feasibility diagram……………………………………………………………………………….................. 19 6.2: Taifi and Hussaini table grape varieties profile……………………………………………………………………. 21 6.3: Jui local cultivation system………………………………………………………………………………..................... 22 6.4: A modern pack house………………………………………………………………………………............................ 27 6.5: Carton and wooden package used at Feroz Nakhchir district……………………………………………… 29 6.6: Standard labeling………………………………………………………………………………................................... 31 6.7: Standard picking process………………………………………………………………………………....................... 32 6.8: View of typical packing line……………………………………………………………………………….................... 33 6.9: Individual bunches are wrapped in sponge (right); (b) Wooden package with grape packed in plastic bag (middle); (c) Carton package with paper stripe separating bunches (left). ……………
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6.10: Individual plastic basket with carton container (most desire package) …………………………….. 34 6.11: Standard packaging line………………………………………………………………………………....................... 35 6.12: Current Transportation System for exporting Taifi grape to Pakistan…………........................ 36 6.13: Air distribution systems in truck trailers for table grapes. …………......................................... 37 6.13: Air distribution systems in truck trailers for table grapes. …………......................................... 37 6.16: MIRAN GOZARGAH cold storage pictures. …………................................................................. 38 6.15: Taifi grape after two month storage in cold storage………….......................…………................. 38 7.1: Technical feasibility diagram………….......................………….......................…………..................... 44 8.1: Human resource feasibility diagram………….......................………….......................………….......... 47 9.1: Market feasibility diagram………….......................………….......................…………........................ 50 9.2: Current distribution channels………….......................………….......................………….................... 51 9.3: TCSC interview with national exporters at Kabul………….......................…………........................ 52 9.4: Exporting partner of Afghanistan grape (2013-2015) ………….......................…………................ 56 9.5: Total values of exporting grape to abroad market (2013-2015) ………….......................………… 57 9.6: Al-Aweer central fruit and vegetable market, Dubai, UAE………….......................………….......... 67 9.7: visit cards of UAE traders who are willing to do business with Afghan grape exporters by commission………….......................………….......................………….......................…………....................
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Acknowledgement
This is part of report for Road to Jobs (R2J) feasibility study on new market for fresh grape export promotion program activities in the district of Feroz Nakhchir in Samangan province, northern Afghanistan. These activities are performed during months of May-Oct 2016 by Tanin Consultancy Service Company (TCSC) as part of the bigger program of International Labor Organization (ILO).
This study couldn't be succeeded without efforts and kindness of research team members of TCSC who worked hard. We appreciate the investments of time and resources made by the farmers and merchants who participated in the project. They have shown great patience in once again listening to an organization’s promises for assistance. Importantly, they have expressed their appreciation for the project and the benefit they have derived from it. They are willing to continue the effort to improve the ability of the grape value chain to provide valuable benefits to farmers, merchants and consumers. We are also appreciate and thanks Mr. Tonderai Manoto and Mr. Mohammad Mohmand for kind technical assistant and their efforts to complete this project.
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1. Project Background
The project follows a market systems approach to address important underlying constraints inhibiting better employment and income creation, which in turn contribute to improving livelihoods and poverty reduction. R2J targets poor and vulnerable rural households and income earners who work either in rural communities, or in urban centers and other major centers of employment in both provinces.
As part of the R2J project plan, a Markets System Analysis (MSA) was conducted for grapes/raisin in two provinces of Balkh and Samangan. The purpose of the MSA was to assess the grape/raisin sector and see its potential for growth and improvement in order to help create more and better jobs. The MSA identified a number of underlying causes of underperformance in grape sector from input supply to end market.
One of these causes is the lack of an export market which offer the farmers best price. Currently the fresh grapes of Feroz Nakhchir district (Feroz Nakhchir district is one of the districts in Samangan province which produces high quality Taifi and Hussaini grape) is being exported to Pakistan, however every year the farmers suffer loses, as Pakistani market does not offer good prices. Sometimes the Pakistani border is closed during the peak harvesting season and this causes loses to the farmers and exporters.
Some of the exporters interviewed during the assessment process said that there were a number of potential foreign markets for Afghan fresh grapes e.g. UAE, India, and China etc.
The project is looking at working together with Balkh Chamber of Commerce and Industries (BCCI) and Feroz Nakhchir union of grape producers to explore a new market for fresh grapes of Feroz Nakhchir, this requires a proper feasibility study. After selection of Tanin Consulting Service Company (TCSC) as the consulting firm for doing this assignment, the feasibility study conduct to study potential markets for the product and doing a comprehensive feasibility analysis to analyze production constrains, competitors and making a business model to export Taifi grape to the abroad potential market. The project is completed in Oct 2016 by doing domestic market research and abroad market study in three countries at the region.
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2. Executive Summary
Tanin Consultancy Services Company was assigned under a consultancy service contract to conduct a fully-fledged feasibility study to identify new export markets for grape sector in Samangan province (Feroz Nakhchir district as the main producer of Taifi grape), seeking potential buyers and analyzing competitors using SWOT analyzing method approach, revenue projections and capital requirement for developing sector and alternative routes of transportation, hence minimization of cost and enhancement of revenues for fresh grapes from northern Afghanistan, recommendation to the producers and exporters to meet abroad requirement in order to expand the business. This will ultimately achieve the aim of the R2J as additional jobs will be created in the region.
The survey was divided into two parts, mainly domestic assessment of the production; current export situation and regional market study to identify new export markets for fresh grapes of Feroz Nakhchir district. In essence, this report summarizes the main findings of the domestic survey together with those from a series of focus group discussion (FGD) meetings and key informant interviews with middlemen and exporters held in Samangan province of Afghanistan, to visualize the district's productions situation and the current market status. In continue, the report completed with information gathered from the region fruit markets through desk study research and market assessment through direct observation from China, UAE and India as the main potential market for Taifi variety grape of Samangan province.
During the domestic survey, it received 341 valid responses from interviewed farmers, 10 Focus Group Discussion (FGD), responses from 8 middle men and six major grape exporters. The FGD participants represented a spectrum of grape producers, middlemen, village leaders who are engaged in grape production and export activities. The participating merchants were typical Afghan fresh fruit exporters. They have years of experience exporting un-refrigerated fresh grapes to relatively undemanding clients in Pakistan. However, they are inexperienced in preparing and exporting high-quality, fresh, refrigerated grapes. The survey primarily aimed at understanding the current fresh grape production situation and practice, sales and income status, potential buyers in domestic market, challenges and limitations. At the second phase, the potential abroad market was selected for more research and study which have been done by Tanin high experienced hired staff through direct observation and visiting the targeted markets.
The data collected shows that an overwhelming majority of grape producers face the challenge to sale their products on a fair price due to relatively high production cost, limited domestic market, export possibilities and technical support limitations. It has been realized that the production cost is high due to cost of water, since farmers irrigate their vineyards by consuming fuel. Additionally, lack of some minerals in the soil also affects their product. Pesticide and spraying time and methods have direct effect on the quality and quantity of grapes produced, while limited knowledge among the farmers and less technical support of them has made this worse.
Export market analysis revealed that traditional Afghan exporters have no ideal system in place for analyzing demand of foreign countries and potential importer countries for their products. Despite the fact that Pakistan is a major export hub for Feroz Nakhchir grapes, it's realized that the demand assessment is even not in place for Pakistan markets. The merchants just supply their product to these markets and selling them on market price. It further revealed that the merchants are not willing to take risk for testing new export markets due to various reasons such as possibility of loses, damages of the product while shipment or darkness of the profit margin. They were not well in seeking, lobbying or negotiating in finding new market opportunities at the region market for the product and even didn't do
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any pilot shipment to the region markets to fit the product specifications with market requirement such as product quality, packaging, labeling, transporting standards and etc.
Feroz Nakhchir farmers produce only "Taifi" grapes for export, which is a kind of seeded variety with possibility of selling as table grape in domestic market and Pakistan market. Mentionable that, this type of variety didn't tested in any other region market for sale except of Pakistan. However to export this product to Pakistan, exporters have faced with challenges to reach and sell the products in these markets such as illegal payment on the way of farm gate to Pakistani market, increasing Pakistan border tariff on afghan fruits and decreasing grape price due to lots of importing grapes from central Asia countries like Tajikistan.
While exporting grape to current abroad market, traditional way of packaging and sorting are being practiced which has tremendously effects on quality of the product for export thus affects in the prices and ultimately the revenue for farmers. To promote fresh grape export, it’s necessary to sensitize merchants in;
- Finding and targeting an appropriate market at the right time - Selection of vineyard: regarding to product quality, harvesting time and quantity of the vineyard - Purchasing; as the farmers doesn’t allow the merchants to sort products in grading base - Sorting and trimming the grapes: current practice of sorting and trimming the grapes are not
standardized which have to be practice while sorting and grading - Packaging: grapes must be packaged based on different target market needs regarding to weight,
shape, design and package material - Pre-cooled the products and then placed in short-term cold storage which is followed by transport
either via land or air to the international target market places. - Check and control of tax free document which is issue by Afghanistan to host country such as form
A, SAFTA and Certificate of origin granted by china. - Clearance documents procedure in the host country: Customs procedures by help of commercial
clearing agents. - Interacting with recognized commission agent or international buyers
Abroad market study have completed in two steps; first step was targeting fruit markets at the region which it was possible to deliver grape by existing transportation system to those market and analyzing these market by SWOT model. After sorting all markets, potential markets selected based on good possibility of transportation via land or air, high price of grape at the markets and vastness of the market. Visiting the selected countries was the second step to finalize abroad market study. In this step China, UAE and India visited by the company hired staff during September and October when the Taifi grape harvested in the district.
Abroad market study result shows that; China can't be target market furthermore due to not existence importing code and impermissibility of afghan fresh fruit to china. UAE is also is not feasible due to high transportation cost by air and shipment cost Vs. selling price and inappreciable profit margin but Indian market could be feasible during Aug, Sep and Oct while Delhi market demand for grape is high and Indian domestic supply is less.
The feasibility study report contains four key feasibility elements named as; Human resource feasibility, technical feasibility, market feasibility and financial feasibility plus recommendation for expansion of the business and entering to the recommended abroad market.
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3. Methodology approach of the study The project methodology for data collection of the project was based on primary and secondary data research approach; the primary data, a one-on-one interview was applied by using questionnaire form from farmers, middlemen, exporters and direct observation from the vineyards and farmers performance. For secondary data, it was done by collecting data from related documents, internet browsing and various media. Tools of the data collection is interview forms, individual questionnaires, focus group discussion questionnaires and field survey checklist. Questionnaires and interview forms was designed based on qualitative and quantitative method of data collection and tested by conducting pilot survey at the target district.
3.1. Data collection and field works: In this phase, the business actors have been recognized based on Grape Value Chain that mainly are:
- Farmers (Small, medium and large land farmers) - Middleman and dealers - Exporters - Importers - Distributors, Super Markets, Restaurants and retailers - Cold storage owners
IMPORTER / WHOLESALER /
DEDICATED SUPPLIER
MIDDLEMAN
Keeping and storing by;
Local traders
Middlemen
Exporters
EXPORTER
Yield selling costs
Additional part of yield selling price
Market factors
FARMERS
Lobbying and communication
Export cost
Tariff and tax
Commission cost
Household farms
Commercial farms
Cleaning and trimming
Packing and packaging
END CUSTOMER
PAKISTAN MARKET
INPUTS
Rootstock
Fertilizer
Ag chemic
Irrigation
Farm equipment
Figure3.1: Feroz Nakhchir grape value chain
FRESH FRUIT STORE
PROCESSING
LOCAL MARKET
COLD STORAGE
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To gather information from each of the value chain actors; questionnaires were developed in a way that necessary information based on agreed TOR and specific objectives to be achieved. Based to each value chain actor, questions were prepared to find the necessary information. The details of data organization shows at the below table.
Data organizing table: required information and source of information
Value chain actor name
Required information Source of data
Tools of data collection
Tools of data analysis
Number of Questionnaires/interview
Farmers Production cost, land size and production yield, sale price, cultivation and growing method, harvesting method, practice of using agro-chemical and fertilizers, harvesting calendar, sales method, business challenges and constrains
House hold farmers and commercial farms
Questionnaires, Focus group discussion and direct observation
SPSS and in depth qualitative data review
341 farmers interview questionnaires, 10 focus group discussion
Middlemen Product price, selling price trend, purchasing methods, processing methods and harvesting, harvesting tools, picking, packing and packaging, related farmer's network, exporter's linkage, selling quantities, payment mode to farmers, product quality, required quality expectation, transportation mode and keeping facilities.
Middlemen in large and small scale
Bi-lateral interview
SPSS and in depth qualitative data review
8 middlemen Bi-lateral interview
Exporters Purchasing cost, transportation cost, export documents needed, current abroad market for export, potential abroad market, any exporter's efforts in line of exporting, packaging and ideal packaging for target and potential markets, product quality, Pakistan demand analysis, demand analysis, international competitors in abroad markets, mode of
Exporters in local and national level
Bi-lateral interview
in depth qualitative data review
7 national exporters
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payment and received, export challenges and constrains.
Association, farmer groups
Date of establish, achievements, number of members, fields of working, relation with other NGOs and INGOs, services, exporting efforts in the past, export challenges, district facilities, any research regarding product export or business expansion.
Association or any other farmers firms or group
Bi-lateral interview
in depth qualitative data review
1 or 2
Importer Market price, vastness of the market (how big the market is?), willingness of the importer for importing the afghan grape specially Taifi grape, commission fee, transportation fee, cargo fee, municipality fee, required standards and quality of the host country, importing necessary documents, competitors and contact info.
Importers from China, UAE and India
Bi-lateral interview
in depth qualitative data review
3 to 5 importer in host countries
Cold storage owner
Cold storage location, service condition, fee of the service, experience of working in grape product and sector
District and Mazar-e sharif cold storages
Bi-lateral interview
in depth qualitative data review
As much as possible
Transport agencies, cargo service providers
Kind of transportation, availability technologies and services providing, fee of the transportation, destinations
District and Kabul cargo and transportation agencies
Bi-lateral interview
in depth qualitative data review
As much as possible
Tools of the research were developed in cooperation with ILO organization to meet their requirements of the feasibility study based on the agreed ToR. After Approval of the questionnaires, the pilot survey and necessary modification has been brought to the research tools.
The following tools have been used for the study during feasibility study of the project. - Individual questionnaires (Farmers)
Table 3-1: project data organizing table
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- FGD questions (farmer’s group) - Bi-lateral interview questions (Middlemen, exporter, association, cooperation, exporters
and governmental organization) - And direct observation
The field survey considered 3,000 families working in vineyards which was targeted. Morgan formula has been used to set sample size calculation with 95% confidential level and 5% error level. The sample size shows 341 questionnaires from farmers. As the target district have 15 villages, the number of questionnaires per village was considered 15-28 questionnaire with the preference to fill 3-4 questionnaires with female interviewees at all villages in case of possibility.
FGDs were composed of a group of 8-15 participants in 10 villages of target district. The participants of the FGD were selected on random basis among farmer groups from all 15 villages and participation of females in the discussion meetings are mostly welcomed but unfortunately, no women participated to the meetings due to the district's culture.
Furthermore 7 interviews with exporters, 6 interviews with dealers and whole sellers, 1 interview with grape association in the target areas were performed. Separate interview with Afghanistan chamber of commerce (export department) at Kabul and department of trade and industries in Balkh province was done to understand regulation of exporting with necessary documentation, volume of afghan grape exporting and getting their recommendation and suggestion regarding to find the right potential market.
To analyze the market feasibility, three to five interviews with foreign importers in UAE, China and India was completed by TCSC expert staff.
The project team was composed of a Project Manager; an expert consultant responsible for designing tools for carrying out the study, finalizing all questionnaires, writing of each phase and final project report, presentation of report to ILO and other related parties; a Survey Team Leader responsible for managing survey team, developing day to day survey plan, assure the quality and quantity of questionnaires and documentation for data entry; Survey team (4 persons) responsible to conduct individual and bi-lateral interviews in the field and target places; and Data Entry Clerks (2 persons) responsible for data entry of filled and quality approved questionnaires. The survey team leader and market expert consultant has carried out other relevant complementary interviews and meetings with INGOs and other important stakeholders.
For the purpose of quality assurance, an orientation session has been conducted to the survey team for their understanding and data quality. During the orientation session, clarifications about the project scope of work, background of project, specific objectives, target groups, nature of the project and data collection methods and techniques including all tools of the survey using for carrying out the assignment, were provided.
3.2. Project Data Entry and Analysis This phase of the project included data entry to the Excel sheet program and analyzing data during data collection and validity on daily basis. The SPSS application has been utilized for analysis and output production. This report is a consolidation of information based on the outputs of data analyzed through application of SPSS.
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3.3. Feasibility study diagram
4. Location Description:
4.1. Province profile:
Samangan province is located northern Afghanistan between 35.35-36.64 degrees latitude and 66.87-68.57 degrees longitude. Samangan borders the provinces of Balkh and Kunduz to the north, Balkh and Sar-i-pul to the west, Baghlan province to the east and Bamyan provinces to the south. Samangan has 7 districts that encompass 13,651.17 square kilometers which includes 355,758 hectares of agricultural land. There are a total of 487 villages with an estimated population of 383,311 people as of 2014. Samangan is famous for producing almonds and pistachios. The majority of the Samangan residents are engaged in animal husbandry, especially sheep and cattle and fruit production activities. In last years, Samangan farmers grew 30 different crops on approximately 144,454 hectares of land (10.58 percent of total area). The province’s cultivated area is mostly concentrated in the northwestern and southeastern districts because of the vicinity to the Samangan River. Almost 70 percent of the cultivated land is
Market Opportunity
Identification
Technical
Feasibility
Financial
Feasibility
Human Resource
Feasibility
Market
Feasibility
Are we feasible in exporting the Taifi grape to abroad?
Viability
Yes No
- Preparation Business plan
- pre-testing export,
- Branding and encourage
big exporting companies to
export the product to the
abroad
- Existing in the market
- Expansion the markets
REVIEW IN STRATEGY:
- Expansion of current domestic markets
- Review the current abroad market (Pakistan)
- Research and Development for changing variety to meet
the abroad market requirement
- Reduce cost of production to increase chance of
compatibility at abroad market
- Lobbying with government to facilitate the exporting by
investment on infrastructures
Picture 3.2: Feasibility Study Diagram
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concentrated in 4 of the 7 districts of Samangan. The remaining 3 districts are suitable for keeping livestock because of the mountainous terrain. The districts of Samangan are as follow:
1. Aybak 2. Dara Suf Bala 3. Dara Suf Payan 4. Hazarat Sultan 5. Feroz Nakhchir 6. Roi Do Aab 7. Khuram Sarbagh
Owing to its relative isolation, Samangan province is underdeveloped with no energy infrastructure and has a high rate of illiteracy. The economy revolves around agriculture, with farmers cultivating grains, fruits, and nuts on the region’s fertile river plains.
4.2. District profile: There are 3000 families living in Feroz Nakhchir district1 with core business of grape production. The land tenure-ship ratio is 97:3, where 97% of the farmers own land while about 3% either works on share farms or are renting. Size of lands used as vineyards for grape production differ from less-than 1-Jerib to more-than 5-Jerib with the majority of farmers owning 2-jeribs (26.6%).2
Size of grape vineyards
Frequency
Valid
Percent
Valid 1 Jerib or less than 1
Jerib 82 24.0
2 Jerib 91 26.6
3 Jerib 59 17.3
4 Jerib 37 10.8
5 Jerib or more than 5
Jerib 73 21.3
Total 342 100.0
1 District governor office, CDC data 2 Survey research data
Picture4.1: Districts of Samangan Province
Table 4.1: Size of Grape vineyards lands
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5. Grape industry outlook
5.1. World grapes production industry: World table grape production is forecast to increase slightly to 21.0 million tons as continued growth in China is mostly offset by declines in Turkey and Chile. Global trade is forecast to contract slightly as lower exports by Chile, Turkey, and the United States only partly offset China’s record exports. The global table grape industry has grown significantly over the past 10 years. During this time, international trade in the sector has more than doubled from US$4.6 billion in 2003 to US$11.2 billion in 2013.3 Growth has been primarily driven by fresh grape exports from developing countries, including expansion and upgrading of the Chilean production, and new entrants India, Peru and Turkey. As a labor-intensive crop, grape
production is well-suited to developing countries, providing an important source of rural employment.4 Juice production continues to be led by developed country grape producers with established traditions in production and technology use in processing. However, as trade in fresh grapes has become increasingly global, developing country producers have been required to adopt a wide range of technologies to support production, particularly with respect to variety development and adaptation to specific locations and soil types, integrated pest management, and use of appropriate cold chain techniques to ensure the quality of the grapes is not adversely affected during shipping. Three major changes have shaped the global table grape industry in recent years:
I. Production has shifted from developed countries to new producers in developing countries; II. There has been an increased focus on product differentiation with the introduction of new
varieties; and
III. There has been a consolidation of production to large producers.5
5.1.1. World top producers of table grape The graph and table below shows that, China’s production is projected to surge 800,000 tons to 9.6 million on higher area and favorable growing conditions. Exports are forecast to jump 76 percent, up 97,000 tons to a record 224,000 on higher shipments to Thailand and Vietnam. Imports are forecast down slightly to 217,000 tons on lower shipments from the United States and Peru. Turkey’s production is forecast to drop 345,000 tons to 2.0 million due to a spring frost in the main growing region in western Turkey. Exports are projected to fall 82,000 tons to 175,000 on lower shipments to the EU as well as top market Russia, where a ban on certain Turkish imports went into effect January 1, 2016. EU’s production is forecast to rise a modest 49,000 tons to 1.7 million on higher output in Spain. Exports are projected to slip 14,000 tons to 87,000
3 (UNComtrade, 2015) 4 (Mencarelli & Bellincontro, 2005) 5 Peru in the Table Grape Global Value Chain, 2016 report
Figure 5.1: World to fresh table grape producers
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as alternative markets fail to replace lost market share in Russia, where the ban on EU grapes continues. Imports are projected to slip 18,000 tons to 585,000. United States’ production is forecast to rise slightly to 984,000 tons despite drought concerns in top producing state California. Final trade data show exports are down 60,000 tons to 329,000 driven by lower shipments to top markets. Imports slipped 17,000 tons to 530,000 on lower available product from Chile. Steady production coupled with lower exports is expected to boost consumption to a record 1.2 million tons. Peru’s production is expected to expand slightly to 510,000 tons as new plantings continue to reach maturity. Exports are down slightly to 295,000 tons on competition from Chile in key markets China and Hong Kong. Chile’s production and exports are forecast down nearly 100,000 tons to 840,000 and 660,000, respectively, reflecting the continued impact from last year’s March flood and July snow. Russia’s production forecast is lowered to 90,000 tons due to losses in both commercial and household vineyards. Imports are projected to decrease 51,000 tons to 250,000 driven by falling consumer purchasing power, declining consumption, and the inability to replace banned grapes from the EU and Turkey.6
5.1.2. World consumption of fresh table grape
Global consumption of fresh table grapes is set to rise for the 6th consecutive year, going from just over 15.6 million tons in 2009/10 to an expected 20.9 million tons in 2015/16, amounting to growth of nearly 34%.China, India, the EU, Turkey and Brazil are the top 5 consumer markets.
6 USDA, Fresh Deciduous Fruit: World Markets and Trade (Apples, Grapes, & Pears), June 2016
Table 5.1: world Fresh table grape production
Figure 5.2: Total World consumption of table grapes
17
5.2. Afghanistan grape production Grapes and raisins are productive horticultural crops of Afghanistan due to large area of plantation and the high value received from which is approximately 44% of the horticulture production of Afghanistan belong to grape and its processed production such as raisin. The chart below shows the percentage of
each horticulture fruits in Afghanistan in 2004.7
Afghanistan contains a cultivated land area of 78681 hectare grapes8 which Grapevine is mostly growing by traditional system called earth–trellised “Jui” system in Afghanistan, furthermore freestanding head system, and now it’s practicing T and I (cordon) systems in some region of the country. Cultural and post-harvest practices are generally still traditional, disease pests control is not applied properly but ministry of Agriculture, Irrigation and Livestock of Afghanistan with collaboration of national and International organizations are working for improvement of not only grapes production but all agricultural commodities. Domestic production of grapes was estimated 805,072 Ton in 2015 having increased by 28% in the last 6 years (Central Statistics Organization). Domestic grape production is present in the south-east region with Kandahar as one of the main producing provinces, northern and central regions, with Sar-e-Pul, Parwan, Balkh and Samangan and Kabul as main producing provinces but also west of the country in Herat province.
7 Altai consulting group 8 Central statistic of Afghanistan
Figure 5.3: production of fruit and vegetable in Afghanistan
18
5.2.1. Vineyard yield of Afghanistan versus other regional countries As the table below shows the vineyard yield of Afghanistan is low but it is near to neighbor countries which shows 8.5 Mt/H9. This data related to 2004 and new data shows an increment to the yield of production.
In 2015 total production of Afghanistan horticulture was 805072 Mt with 78681 Ha area which means the yield of production increased to 10.2321 (Mt/H). This calculation for Samangan province shows, 9 Mt/Ha and due to Tanin consulting service company data gathered from the Feroz Nakhchir district, vineyard yield at Feroz Nakhchir district in average is 24.7 Mt/Ha10 so it means that, yield of production is in a satisfaction condition and farmers have to focus on the quality of the products to meet the standards of the abroad markets.
Area/ Ha Production/Ton Yield
Afghanistan 78681 805072 10.232102
Samangan 485 4365 9
9 Altai consulting group, UNDP funded project, 2004 10 Survey research result shows, one jerib productivity is between 3960 and 5940 Kg grape in Feroz Nakhchir
district which the average quantity is 4950 Kg per jerib which means 24750 Kg per Ha which is equal to 24.7
Mt/Ha.
Grape Yield (Mt/H)
India 24.49
United States of America 16.65 16.65
China 11.19
Turkey 9 to 11 Iran 9.51
Afghanistan 8.50
Turk-Uzb-Taj 5.30
Pakistan 4.14
Table 5.2: Vineyard yield of Afghanistan and other regional countries in 2004
Table 5.3: Vineyard yield of Afghanistan and Samangan province
78681 485
805072
436510.23210178 90
100000
200000
300000
400000
500000
600000
700000
800000
900000
Afghanistan Samangan
Vineyard yield production, Afghanistan Vs. Samangan province 2015
Area Production Yield
Figure 5.4: vineyard yield production of Afghanistan comparison with Samangan province (2015)
19
6. Technical Feasibility
Technical Feasibility
Production Post Harvesting Harvesting
Variety Is this variety produce in the target district acceptable in target abroad markets?
Input supplies Is the input supplies available in the district?
Pest control Has the current pest and insect control effects on product quality? What is current good practice in using pesticide in time of production at the farm?
Production method Is the current production method for producing grape suitable or needs to be improved? Yield of production is enough? Is production quality meet the abroad requirement market?
Harvesting Calendar Is the harvesting calendar of Taifi grape has any advantage?
Picking Is the current picking process good or should improves to access the best practice of picking?
Packing and Packaging What is the current packing process at the district? Is it good or should improve? What is good practice in packing? Is the current package are suitable for abroad market? What is desire abroad markets packages?
Labeling Is this practiced for current export? What is standard in labeling?
Transportation system How is the current available transportation system? What air transportation system is available? What is the cost of transportation system to the selected markets? What is the challenges of current available system?
Cold storages Is there any cold storage in districts? Is there any cold storage in the neighboring provinces? What problems the cold storage have in providing services? How much is the cost of cold storage service?
Are the product technically feasible to export and compete with other products comes from other countries?
Yes No
Looking for markets that meets
with the current production,
harvesting and post harvesting
method of the target district?
What is the good practice in
production, harvesting and post
harvesting? What factors of the
production, harvesting and post
harvesting needs to improve and
how?
Figure 6.1: Technical feasibility diagram
20
6.1. Description of the product Grapes yield in the Feroz Nakhchar district of northern Samangan province has boosted to nearly 6-7 thousand tons during the last two years compared to last four years of 4-5 thousand tons which create around 200 million AFN to the district. The suitable climatic and soil conditions accompanied by the increased grapes cultivated areas are the main reasons behind the boost in the yield. As per our findings from individual and FGD interviews about 600 hectares of land had been cultivated with grapes in the
district which is used to produce table grape.11 6.1.1. Grape varieties in Feroz Nakhchir district
The district is well known by its Taifi grape product. As you can see at table 2.6 and Figure 2.6, about 81.8% of farmers produce Taifi verity of grape while 18.2% is producing Hussaini grape. This finding shows that most of people cultivate Taifi type of grapes in the district due to the quality and more shelf life as a fresh grapes hence considered as a suitable export fresh table grape. But Hussaini variety cultured at the district for the purpose of responding to local market.
Question-Which type of grapes do you plant in
your farm?
Responses
Percent
Type of grapes that plant Taifi 81.8%
Hussaini 18.2%
Total 100.0%
At the below table both, Taifi and Hussaini grape specification are shown as product profile.
Taifi:
Flowering time: 1st to 3rd week of May
Ripening time: first weeks of Sep
Bunch size: long
Berry size: big Berry
color: pink to red
Seed presence: present
11 Survey result data
81.8
18.2
0 20 40 60 80 100
Taifi
Hussaini
Picture 6.1: Taifi Grape
Table 6.1: Percentage of Taifi and Hussaini cultivation at the district
21
Hussaini: Commonly grown group of cultivars from North Afghanistan. Bunch is medium in size. Berry color is green-yellow. Seed is well developed. It is seeded with more sugar than Taifi variety. Also it has soft skin. Grape has a good fresh market. Flowering time 1st of May Ripening time: last weeks of July
In grape industry, vineyard owners produce grapes based on the target market and customers, some of the grape vines (mostly seeded variety) plant for wine factories for making wine, some others plant for table grape and fresh consumption but some of them can use for both, it means that they can use as table grape or use in wine factories like American red globe variety. Based on the information collected from target district, only 84.2% of our respondents in the district which makes 288 person only using the grape as table grape for sale or family consumption and have no idea regarding secondary product of grape but most of the produced grape in the world use grapes to produce secondary product such as wines, juice, jello and other derivation products. It mentionable that, Taifi and Hussaini grape are seeded variety and most of the consumers in the world don't use seeded variety as table grape and interested to select seedless varieties for table grape consumption. In this case based on TCSC research and study in domestic and abroad market both varieties (Taifi and Hussaini) are not welcoming by importers and end customers or have a less price scale to other seedless varieties in the market.
Taifi variety selected by farmers in the Feroz Nakhchir because of some reasons named as below: productivity of this variety is better than other variety such Hussaini or Kishmishi variety Late ripening time which help the farmers to sell the products in high demand of the market when
the market supply is low keeping and storing the product in long time without cold storage compare to other varieties as
this variety of the grape is stronger against weather condition after harvesting Taifi variety of grape is well known by Pakistan market
6.2. Grape production at Feroz Nakhchir district The traditional “jui” or ‘earth–trellised’ vineyard system is the main grape production system in the country, while this is being applied in the district studied, too. The district grape growers use the jui production system because they think it protects the grapes from freezing the vines in winter and heat and wind damage in hot season which is the cause that they are not convinced to another system, such
Frequency Valid Percent
Valid Yes 54 15.8
No 288 84.2
Total 342 100.0
Picture 6.2: Hussaini Grape
Table 6.2: percentage of farmer's familiarity with other processing products from Grapes at the district
15.8
84.2Yes
No
Figure 6.2: Taifi and Hussaini table grape varieties profile
22
as wire trellising. It is the system that has been used since antiquity so it carries a strong inertia of tradition as well. In other hand the materials which is use as affords support to vines is straw pipe which is find easily and cheap in the district.
As can be seen from Figure 4.7 and table 5.7, about 495 Taifi grapevines out of 342 number of cases and 396 Hussaini grapevines out of 75 numbers of cases have plant in one jerib in average. This finding shows how more grapevines are in one jerib. The standard number of vines in one jerib is 350 – 400 vines but farmers at the target district planted around 500 grapevine in one Jerib land to increase productivity of the harvesting. Indeed more planting of grapevines in the land can effect on quality of the produced products due to lack of minerals in the land.
Table 6.4: number of each grape variety in
one Jerib land?
N Mean
No of Taifi grapevines 342 495.21
No of Hussaini
grapevines 75 395.97
495.21
395.97
0
100
200
300
400
500
600
No of Taifi GV No of Hussaini GV
Picure 6.3: Jui local cultivation system
Table 6.3: number of grape vines variety at one Jerib
23
Another finding as below Figure and table shows is that each grapevines produce about 12.55 kg from Taifi and 9.39 Kg from Hussaini grapevine. The result shows that productivity of Taifi grapevine is 1.25 times more than Hussaini grapevines in Feroz Nakhchir district which is the most reason of selecting Taifi grapevine instead of other grapevine at the district.
6.2.1. Grape production activities at Feroz Nakhchir district The main activities of farmers during growing of the grapes in Feroz Nakhchir district are as below:
No Main activities of the production Time Tools Materials use
1 Land preparation by excavator for planting in case of establishment or expansion of the vineyards
March (Hoot in solar calendar)
Excavator or and shovel
Using man power
2 Planting the new grape vines which are purchased from the NGOs or developed by them self to the land
during March (late of Hoot and beginning of the Hamal in sola calendar)
Shovel, transportation tools
Rootstock and using man power
3 Establishment of local trellising (CHAILA in local language) or renew the old ones
At the second year of vineyard establishment and beginning of the year in case of repairing the old ones
shovel Straw pipe, metal wire and manpower
4 Fertilizing the lands
Three times during the growing and one or two times at winter
shovel Fertilizer (Urea and Phosphorus), man power
5 Weed the lands
during the growing, started from March to August
Scythe and shovel
manpower
6 Spraying and using agro chemical to control diseases and insect
No specific time and schedule
sprayer Agro chemical (mostly use; sulfur, super top, Malathion) and manpower
How much each grapevine productivity is?
Mean
No of Kg from Taifi 12.55
No of Kg from Hussaini 9.39
No of Kg from other types 0
12.55
9.39
0
0 5 10 15
No of Kgr from Taifi
No of Kgr from Hussaini
No of Kgr from other
types
Mean
Table 6.4: Taifi and Hussaini productivity per vine
24
7 Cutting vines leaves: leaves cut to let the grape get the sunlight.
This act is starting from beginning of June till end of harvesting when vines have big leaves, Commonly it is continue till harvesting time.
By hand manpower
8 Cutting vines branch
This act is start after harvesting time for Taifi grapes it usually launches on November.
Cutting scissors and knife (DISCALA in local language)
manpower
9 Covering vines: reducing risk of frozen of the vines during autumn and winter, and the farmers experience shows that if they do not do this, the vines will be freeze. They cover the vines with soil and their leaves, and at the end of winter they tight and stand the vines to trellising again.
After harvesting and continue to near of the winter
Shovel manpower
6.2.2. Pest and insect control The district farmers doing spraying pesticide based on suggestion and recommendation of NHLP office, provincial department of agriculture and livestock (government line department) or other organization and NGOs working in this field, but mostly they use just liquid and dry sulfur and some of the farmers purchasing pesticide just by going to the shop and discussion with shop owner without consideration of, pesticide quality, brand of company, country of origin and many other things which have to highly considered while using pesticides. The survey team observation emphasize that, the farmer’s information is poor according to;
identification of common diseases, common insects, diseases and insect control, choosing the appropriate fungicide Application and proper using of fungicides Precautions and using safe clothe while spraying Hygiene control
There is not specific schedule for spraying the pesticides and they use pesticides and chemicals until fungus appears on the plant which usually is too late and they stop spraying the pesticide one month before harvesting time. Uncontrolled of using Pesticides, low quality and less/lack of knowledge of fungicide application could be the potential reason of rejection the exporting packages while laboratory testing at the import country. Disease and insect control is the main cause of decreasing quality and quantity of production at the district in last years. In district there are some common diseases such as, powdery mildew and nutrition problems (pale yellow leaves) that in local language they are called:
Aatashak and Shakarak (powdery mildew and downy mildew)
Table 6.5: current production activities at the district
25
kermak, (insect) Zardi (nutrition problem) And Qarqana (Black dots on leaves)
For the first, they use liquid and dry sulfur; to control of insect they use Malathion. For “nutrition problem” and “Black dot on leaves” they didn’t find any solution and it is out of their control.
6.2.2.1. What good practice is in Chemical Use and Storage on the Farm? The storage and record keeping on all chemical and fertilizer applications is an important means of assuring that food produced on the farm is safe for human consumption. Such storage and record keeping has become a prerequisite for marketing agricultural products in certain markets. Records must be kept of chemical storage and use stating:
Name and amounts of chemicals stored in the storage place. Product used in each application Date of application Volume applied Reason for application
All chemicals on the farm must be kept in a secure, dry and lockable place (special building, room or cabinet/cupboard).The chemical store should be labeled as such and must be locked at all times. (See photos below.) If the floor is in a poor condition, the chemical store must be fitted with shelves or the chemicals must stand on pallets off the ground. No Entry to unauthorized personnel will be permitted and a sign board showing this should be visible. The chemicals in the store must be labeled and included in the recordkeeping practices described above.
Maximum Residue Levels (MRLs) Grapes being marketed to certain markets will be tested at a toxicity laboratory to determine if they contain any pesticide residues exceeding the Maximum Residue Levels (MRLs) allowed by health authorities. The table below shows the MRLs for the chemicals typically used on grapes. The use of any other chemicals must be checked against a data base of known MRLs as this is a Critical Control Point in HACCP.
Maximum Residue Levels (MRLs) for Chemicals used in
Grape Production
Sulfur 50PPM
Copper Oxychloride 20PPM
Gibberellic Acid (GA) GA has no MRL as it is sprayedearly for berry enlargement
Here are recommendations for use of other chemicals commonly‐used in grape production:
Wetable Powder (WP) not to be used after berries reach 5mm size Wetable Sulfur. The only danger is visual residue at time of packing. The Safety period before harvest for Dry Powder is 14 days
GA can cause eye and skin irritation and lower gastric tract problems; so, care should be used to avoid contact with GA while applying it to grapes.
Table 6.6: Maximum residue levels for chemical use in grape production
26
At the pack house
Biological, chemical and physical food safety hazards in the grape packing process are similar to those on the farm. Additional sources of contamination in the pack house come from the additional chemicals used in the pack house for cleaning and pest control, lubricants and hydraulic oil and possibly from sulfite in sulfur sheets. Additional physical hazards arise from the additional workers and the building itself.
All lights in the pack house must have covers (Perspex or Plastic) to prevent glass falling in the product and must be within easy reach for cleaning purposes.
Scales must be covered when not in use – to protect against dust. Harvesting baskets (lugs) must be sterilized before taking them to the vineyard. Two baths are
used for this purpose. The first contains the sterilizing agent on Sporkill as an example of a general cleaning agent for pack houses). The picking baskets are washed in the first bath. The second contains clean water to wash off any residue and dirt.
Clipping Scissors must be sterilized before use in the pack house. Two buckets or bowls are used with the 1st containing the sterilizing agent and the second containing clean water for rinsing. Paper towels can be provided for drying of scissors.
Picking baskets and scissors must be cleaned regularly during the packing day. The pack house should be equipped with a water system which can preferably be used under high
pressure to clean and disinfect the pack house after each day’s work. Cleaning agents used must not contain chloride, the loading‐out area door should have a plastic
curtain. An inspection schedule must be in place. All cleaning agents must be kept in a separate clearly marked area. Cleaning equipment such as brooms, mops and buckets must be color coded e.g. red for cleaning
bathrooms and blue for cleaning the pack house. All water should be of a potable quality and tested before the season by a recognized laboratory. Firefighting equipment should be available in the pack house.
27
At the Carton Store The Carton Store should be directly linked to the pack house with only a door allowing access to
the carton store. The same Hygiene principles apply to the Carton Store as the Pack House. Neatness in the store is imperative and serves to keep cartons clean, dust free and clear of other
foreign matter. Cartons must be packed on pallets to avoid contact with the floor. The carton store must be monitored for rodent and insect activity. A fire hydrant or fire extinguisher must be available near the carton store.
6.3. Harvesting The harvesting time mostly starts in September for Taifi grape while it continues for couple of months. We received farmers respond that it takes time 1.5 up to 2 months (in good weather condition) to harvest their product. Report of FGD and farmers questionnaires shows that average harvest of Taifi grape for selling is between 3960 up to 5940 kg per-Jerib (in average 495 orchard cultivated in each Jerib and minimum of productivity is 8 Kg and maximum productivity of each orchard is 12 Kg which means 3960 Kg in low productivity and 5940 Kg in high productivity of the farm).
Picture 6.4: A modern pack house
28
6.3.1. Harvesting calendar Harvesting calendar for two kinds of grapes are as follows: Hussaini grapes that sales in domestic markets harvesting time started from 20 July till end of August and Taifi grapes that export to abroad started from 10th of September till the late of November. Harvesting of Taifi grape is highly depends on weather condition; it means that if the weather is not cold, the harvesting will be postponed to later for getting high price of the market but if the weather is getting cold, the farmers have to finish harvesting to reduce damage risk of the products.
Type of grapes July August September November
Hussaini
Taifi
6.3.2. Picking
The research data shows that, picking techniques related to the farmers which is responsible to pick the grapes from the vines and bring for buyer's workers to do trimming and packaging; It means selection of bunches are depends to farmers selection which is commonly there are no trained workers and workers do picking all the bunches. This will increase the risk of mixing the infected bunches with uninfected bunches to the one basket or box and in case of storing them in cold storage, it will make serious problem for all the products. In target district picking time is early morning because the temperature is at least; it can keep the grapes fresher at boxes.
6.3.3. Sorting and packaging From survey information, only 37.1% of trimming the bad parts of bunches have done by farmers. Also the workers who hired by the buyers to package the grapes do the same thing. This is showing that there is not a developed sorting and grading techniques while packaging. It is also shows that, just three basic packaging materials available at the district which are nylon plastic bag for local market, wooden crate for export to Pakistan and just a few percentage of the farmers used carton packages.
What packaging do you use?
Responses
Percent
Packages Plastic bag 49.2%
Wooden package 50.7%
Carton 0.2%
Total 100.0%
Capacity of the wooden crates are; two Ser and one and half Ser (each Ser is equal to 7 Kg) but currently they are using one and half Ser Capacity wooden crate for exporting to Pakistan. Price of each wooden crate is between 45 to 50 Afghani per crate and it brings from Mazar-e Sharif, Kabul and sometimes comes from Pakistan. Second type is carton package with capacity of one Ser, which is just tried once which is delivered and supplied by an organization to help and support district cooperative. Third type of packaging is plastic-nylon bags which are used for entire market and short distance market. It is very cheap.
Table 6.7: Harvesting calendar
49.2%
50.7%
0.2%
0.0% 20.0% 40.0% 60.0%
Plastic bag
Wooden package
Cartoon
Table 6.8: current packages used in the district
29
Some pictures of packages used in international market
Description of packages Picture of packages
10 Kg wooden box, Shundulkhani Afghan grape seedless variety,
6 Kg carton box grape, card separator package in Delhi fruit market
Picture 6.5: Carton and wooden package used at Feroz Nakhchir district
30
6 Kg carton box packages with 1 Kg box separator in Delhi market, first grade seedless variety
6 Kg carton box package with 1 Kg box separator in Delhi Market, great seedless variety
Iranian grape seedless variety plastic basket package at Dubai Market, 6 Kg with 1 Kg basket separator
31
American Red globe seeded variety, 1 Kg nylon plastic which is repacked in Dubai, it comes in 6 Kg carton package
Lebanon seedless variety, 1 Kg nylon plastic which is repacked in Dubai, it comes in 6 kg carton package
6.3.4. Labeling
Labeling is not practiced for grapes production of Feroz Nakhchir district even for abroad market (Pakistan) but it is necessary to do in case of exporting to any other regional market except of Pakistan which is not considered.
Picture 6.6: Standard labeling
Table 6.9: Sample of grape packing in abroad regional market
32
6.3.5. What good practice is in harvesting? Harvest represents the moment of detachment of bunches from the vine at the proper level of maturity. It should be performed without mechanical damage and product loss, as quickly as possible, minimizing the costs. At the present, hand harvest is the only harvesting system for table-grapes. The primary advantages of hand harvest are:
human picker can handle with care bunches avoiding mechanical damage; selection of fruits starts on the vine because the picker selects maturity and appearance; multiple (generally no more than two) harvest for grading the bunches on the vine; Minimum of capital investment.
Harvest rate depends on the grapes vine growing system, the number and expertise of workers, and packing system adopted. The main problems with hand harvest are due to labor management and picker skill. Moreover quality is such an important aspect in successful marketing that hand harvest is still the only method used for table grapes. Management should be very careful for effective use of hand labor. A short training period is necessary for harvesting and packaging grape according to the market request. At the present, table grapes harvesting is carried out by the picker that selects the bunch and cuts the stem using very sharp shears. Before releasing the bunch in the box, the picker generally removes brown and moldy berries. Thus, the picker performs the following operations:
bunch selection using color and eventually dimension as selection criteria; detachment of the bunch selected by keeping the bunch in one hand and then with sharp scissor
cut the stem bunch trimming and cleaning (removal or decayed and moldy berries) place gently the bunch in the box, without pressing or squeezing
In the case of field packing‖, table grapes may be picked, sorted and packed directly into the shipping container by the picker. Generally the pickers and the packer work together: the picker detaches, trims and cleans the bunch, the packer places the bunch in the shipping container and arranges the packing materials like the sponges
Picture 6.7: Standard picking process
33
tissue paper that are used to improve product appearance and to reduce bruising among the bunches during the following operations. The pickers walk down the vine. The packer move all the packing materials and the table used to support the container during the filling operation. Empty and filled container are left on ground and carried by another worker. This system minimizes re-handling of the fruit, but makes the quality control on the product more difficult than in the packinghouse. In the shed packing (in the packinghouse), bunches are harvested by pickers and placed in field lugs untrimmed; in this case field lugs are generally made in plastic with the following dimension 0.6 x 0.4 x 0.25 m, the weight of grape is generally into the following range 18 to 20 kg. In the packing house, worker productivity range from 50 to 120 kg /h: the smallest shipping plastic basket is 250 to 500 gr, the maximum is 7.5 kg shipping container. It should be considered that packinghouse operation is indispensable if wrapped, labeled and weighted container (bag, basket, and tray) should be produced as required by the supermarkets. Moreover the hygienic conditions that could be guaranteed in the packinghouse make this packing system much more open to future development.12
6.3.6. What packaging and packing standards is to use for export quality? Packing can be viewed as simply a convenience to create the minimum commercial unit for each step of the product commercial life. For instance basket, box and pallet respectively represent the commercial unit for retail, gross and shipment. Considering that shipping container represent a convenient unit to transfer of grape from the point of production to the point of final sale or consumption, it must be designed and used in order to protect individual bunches. This is very important in Developing Countries allowing to reduce the cost of investment if the harvest and sorting operations are performed in the field. The most important requirements of grape package are the following:
Bunches must be immobilized within the container and they should be cushioned against impact. The package should be higher than bunches and it is necessary to avoid over-filling to protect the
berries from compression. Some grape intended for export and some high-quality grapes for domestic market are "wrap
12 FAO report, Fabio Mencarelli, Andrea Bellincontro – LAPO, Department of Food Science and Technology, University of Viterbo, Italy. Email: [email protected] Giancarlo DiRenzo – Technical Economic Department, University of Basilicata, Italy. E-mail: [email protected] Edited by: Danilo Mejía, PhD
Picture 6.8: View of typical packing line
table grape
34
Packed". Here, individual bunches are wrapped in tissue paper or sponge before being placed in their shipping container. Wooden containers are generally used because easy to handle in filed and resistance to high level of relative humidity in the field and during the storage. Anyway the use of card-box corrugated containers is increasing especially for grape that will be sold without prior storage. Plastic containers are even used especially in Developing Countries due to higher resistance (at relative humidity, mechanical) compare to wood and cardboard, easy to wash, light compare to wood, well perforated. For these reasons, and above all for food safety reason, the plastic container is recommendable but for the problem related to the plastic recycle, today most of the Developed Countries prefer wood or cardboard, the latter the best because is even not returnable.
The package's size changes among Countries. Generally dimension is in relation to the quantities that can be exposed, in a day or two, in the retailer. In addition, exporters should use package sizes that meet the requirements of metric shipping containers. Standardized pallet are the 1200 by 1000 mm (47.24 by 39.37 in) pallet base or 1200 by 800 mm (Euro pallet), which is very closely with the 48 by 40 in (1219 by 1016 mm) pallet base used by most food chains in the United States. Size of shipping packages that should be considered for export are: (outside base dimensions) 400 by 300 mm (15.75 by 11.81 in), 500 by 300 mm (19.69 by 11.81 in), 600 by 300 mm (23.62 by 11.81 in). Height range from 100 to 130 mm (3.94 by 5.12 in). The label on the container will contain the producer brand name, the type of product (i.e. grape), the
Picture 6.9: Individual bunches are wrapped in sponge (right); (b) Wooden package with grape packed in plastic bag (middle); (c) Carton package with paper stripe separating bunches (left).
Picture 6.10: Individual plastic basket with carton container (most desire package)
35
variety, weight, and all the information required by the local regulation (producer identity, production area, etc.). Traceability coding is today very frequent. The used languages on the label should be the native language of the country receiving the product. On the container illustrations of the packed product are recommended in order to facilitate product identification and handling. Post-harvest treatments should
be clearly marked on container if it is required. It should be considered that fungicide treatment should have the approval of the Country importing the product.
6.4. Post harvesting and technology requirement Most losses of fresh produce occur between leaving the farm and reaching to the consumer. These losses may be caused by complete wastage of the product or by lower prices due to a reduction in quality. The cost of these losses is also important as the value of the product increases several fold from the farm gate to the final consumer so post-harvest losses are even more significant. The major post-harvest losses in grapes reported by producers and middleman during early maturity, before and after harvesting were mainly occurred due to wind velocity, poor packing, infected by insect or bacterial, handling and transportation, etc. It is estimated that defects and inadequate facilities in post-harvest handling, transport, storage and marketing are the main cause of wastage and price reduction of product. Effective modes of transport, including quality roads, railroads, ports, and air transport, enable entrepreneurs to get their goods and services to market in a secure and timely manner and facilitate the movement of workers to the most suitable jobs. Economies also depend on electricity supplies that are free of interruptions and shortages so that businesses and factories can work unimpeded. Finally, a solid and extensive communications network allows for a rapid and free flow of information, which increases overall economic efficiency by helping to ensure that businesses can communicate and decisions are made by economic actors taking into account all available relevant information. In the coming paragraphs, the
Picture 6.11: Standard packaging line
36
available infrastructure and investment at Feroz Nakhchir district will be analyze which help us to understand technical advantage of the business and compare it with the business competitors in the region.
6.4.1. Current available transportation system to export Feroz Nakhchir Taifi grape The road between district and the main highway of Mazar-e Sharif to Kabul is asphalting right now. Distance between district and Aibak city (center of Samangan province) is 17 Kilometer and it is 85 Kilometer till Mazar-e Sharif city which all the lines are asphalted well. Distance of district to Kabul city is 345 Kilometer which the road is poorly asphalted. Available transportation system from Feroz Nakhchir to abroad markets (Pakistan) is only by road. Vehicles are not equipped with fridge container facility and the only method for cooling the grapes is creating air flow for bulk loads.
Cost of transportation is depends for many things such as; demand for the vehicles at the time of delivery, trafficking, weather and SALANG tunnel situation. Average cost of delivery from district to Kabul is 1.7 Afghani/Kg. transportation cost of Kabul to Peshawar is between 50000 to 100000 Afghani per 3000 Crate and average rate is 75000 Afghani.
Air transportation and shipment Currently there is two Airline companies which have most popular and common in cargo and air traveling, Ariana and Kam Air. Indeed shipment via air flight is costly but it is the only choice for afghan traders to reach faraway abroad market. As in previous subject mentioned, there is four 40 foot container in Hamid Karzai international airport to keep the products cool until loading to the airplane. But the cargo officers worry for fresh fruit shipment due to improperly working of the airport cold storage while needed. The interviews have conduct with both companies and the below data gathered. And mentionable that, here is no cargo facilities from Balkh international airport to abroad. As the data shows in below, Ariana airline is most suitable due to the lower cost and more experience of working in cargo shipment to abroad market. One or two day’s paper work and coordination is needed in advance in case of using any air shipment. Ariana Air line: Cargo shipment with Ariana airline is easier and cheaper than Kam Air and the company seems to have most experienced and interested company for shipment of fresh fruit via cargo. The procedure of shipment by cargo to any country with Ariana airline have must to coordinate one or two days in advance with the company cargo officer in Hamed Karzai international airport.
Picture 6.12: Current Transportation System for exporting Taifi grape to Pakistan
37
Kam Air: Shipment with KamAir is a little bit difficult as the company will not guarantee for shipment of package if the number of passengers increase, because the packages shipped by passengers in same airplane and in case of increasing weight of airplane, the company will delay the shipment to next flight. A coordination for cargo shipment is needed at least one or two days in advance with cargo in charge of the company.
Kam Air cargo facilities and cost
No Departure Destination Freight Charges
Flight schedule Remark cargo officer contact #
1 Hamid Karzai International airport
New Delhi, India
1 $/Kg Every days of week Cargo shipment weight must be at least 500 Kg
0777555000
2 Hamid Karzai International airport
Dubai (UAE) No cargo shipment
3 Hamid Karzai International airport
China No cargo shipment
Ariana cargo facilities and cost
No Departure Destination Freight Charges
Flight schedule Remark cargo officer contact #
1 Hamid Karzai International airport
New Delhi, India
0.6 $/Kg Saturday, Tuesday, Wednesday
500 Kg Minimum weight of package
0752050489 2 Hamid Karzai
International airport
Dubai (UAE) 0.65 $/Kg Sunday, Tuesday, Wednesday
3 Hamid Karzai International airport
Moscow Around 1$/Kg
Every Monday
4 Hamid Karzai International airport
China No cargo shipment but planned to have soon
Table 6.10: Ariana cargo facilities and cost
6.4.2. What transportation system have to use for grape product?
The selection of transport system and right temperature level is not enough to ensure the success of grape transport that depends on many factors like the initial temperature, the refrigeration power, the air circulation system efficiency, quantity of grape and package adopted. For best results, temperatures should be maintained as close as possible to that level of the storage temperature. However to reduce the risk of freezing injury of grape, especially of packages located close to the cold air outlet, the thermostat setting (temperature control) should be set above not lower than 0°C. Grape should be
Table 6.11: Kam Air cargo facilities and cost
38
loaded in truck trailer or container at the optimum temperature level and this level should be strictly maintained in order to preserve the grape quality during the transport period. Adequate cooling rate could not be obtained using the truck refrigeration system that is generally designed to hold the product loading temperature. In order to maintain the temperatures uniform throughout the load with a variation of ±0.5 °C, leakage from the insulated surface or from the doors gasket, long exposure to sun radiation, inadequate air circulation should be avoided because they produce dangerous and local increasing of grape thermal level. Horizontal airflow refrigeration system is the most common for air circulation in van-truck. It could be increased with channels, ducts or local vents that improve air distribution and circulation trough the stacked product especially far from the refrigerant i.e. close to the door. In conventional van-truck it is necessary to prevent obstruction of the discharge air duct and to ensure the air suction by the air-refrigerant fans. For this reason it is advisable to use a spacer between the front of the van container and the first row of pallet of the van or container. The pallets have to be loaded tightly, front to rear in the van containers. The presence of loose space among pallets could cause falling of packages with product damage, and obstruction of the air flow (Picture below).
Picture 6.13: Air distribution systems in truck trailers for table grapes.
Picture 6.14: A refrigerator grape container shipped to Pakistan by ROP organization
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6.4.3. Cold storages
There is a small cool storage container near to the district governor office which is not working properly and couldn’t respond to the farmer’s requirement. A new fruit storage designed by DIANA office with enough capacity at the district but the project implementation didn’t start yet. So currently there is no storage capacity at the district, and farmers couldn’t store their production after harvesting. So most of loses belongs to storage of the grapes and selling the product when the supply in the market is low during the Nov, Dec and January in domestic or abroad (Pakistan) market. Fortunately, MIRAN GOZARGAH cold storage established in Mazar-e Sharif city and starting its work in this year. The owner of the cold storage, Mr. Ghulam Hazrat is most interested to deal with Feroz Nakhchir farmers or association to use the cold storage as rental storage. He purchased 200 Tons grape this year from Feroz Nakhchir middlemen and kept them for two month (Sep and Oct) to sell them in November in higher price. The purchase price of these 200 tons was 20 Afs per Kg and the current sell price of these package is around 60 Afs which is selling to Pakistan market and profit margin of this deal is around 40 Afs per kilogram. The total capacity of the cold storage is equal to 600 to 700 Ton in one time which equipped with Turkish technology. But it is mentionable that, the equipment and mechanism of the cold storage is not fully standard and have some problem regarding to control of the product humidity, technical administration is also poor and inexperienced which needs to improve. As it shows at the below pictures, the products after two month keeping in the cold storages are lost their humidity and freshness and also some fungus and insect is appear in the products.
Picture 6.15: Taifi grape after two month storage in cold storage
Picture 6.16: MIRAN GOZARGAH cold storage pictures
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Indeed the cold storages are the key elements for expansion strategy of the grape industry of the Feroz Nakhchir district, in this regard there is two option which is; 1- establishment of the new cold storage at the district level for district products and increasing chance of competing in off season with potential competitors in abroad markets. 2- Using current capacity of cold storages in Mazar-e Sharif such as MIRAN GOZARGAH cold storage and paying them as rental storage to supply the products in off seasons. As the establishment of new cold storage will take a long time to operate, it is recommended to deal and work with current capacity of the cold storages in Mazar-e Sharif as rental cold storages in short times and for sustainability of this issue, establishment of new cold storage have to plan in long term view in district level. In conclusion, cold storage such a MIRAN GOZARGAH cold storage is an opportunity for improving the business profit of farmers and Feroz Nakhchir association to storage the products for at least three months after harvesting and supply in the market when the markets demand and price is high. For doing this, some points must to consider using cold storage in appropriate manner which is below:
Support existing cold storage to operate in standard manner and practice well as they are not doing yet. In this regard, the existing cold storages operators can support by technical experts of cold storage which is not easily find in the country or using experience of neighboring countries such Iran (as recommended by some cold storage owners) to help them in operation and management of the cold storages.
Encourage local traders and middlemen for using cold storages exist in Mazar-e Sharif with a comprehensive market demand and supply analysis and comparison of market price at the off season time with cold storage cost during storing in cold storages. This can be achieved by running workshops, regular advisory and contact with them, exposure visits to see the facilities and held discussion meeting with cold storage owners.
Regularly monitoring grape market price index in domestic and current exporting market to make business decision in the right manner and time
Another cold storage will start its work within Aug 2016 near to the Kabul fruit and vegetable market with capacity of 1000 Mt. As the cold storage didn’t start yet, administration procedure, fee and quality of cold storage is not clear.
Electricity power There is no electricity power at the district and in case of establishment or planning to establishment of cold storages, it must to be considered that the electricity power facility is not at the service and have to produce by the generator. This will directly increase cost of operating the cold storage and must to calculate to the storing charges. It is effected on irrigation cost as well, most vineyards irrigate with water well which is pumping by water pump. Irrigation cost of each Kilogram of products is reaching to 0.9 up to 1.2 Afghani per KG of production.13 For this issues, some of INGOs are working on this issue and support farmer's lands by solar panel equipment to reduce cost of irrigation. The farmers who are benefited from this program are satisfy from this program and ensure that this program can reduce cost of goods sold of the production and will increase profit of the farmers.
6.4.3.1. What cold storage mechanism have to use for grapes? Recommended storage temperatures for table grapes are -1 to 2 °C. The relative humidity should be maintained around 95%. Although temperatures as low as -2°C have not been injurious to well-matured
13 Survey result, total production of one Jerib land is around 4950 Kg and total fuel consumption without equipment consumption is around 4480 to 5600 Afs per Jerib land. By dividing total irrigation cost on total production cost, it shows that the portion of irrigation cost is around 0.9 to 1.2 Afghani per Kilogram production.
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fruit of some varieties, other varieties of low sugar content have been reported damaged by exposure to - 1.7 °C. Generally 0°C can be considered the optimum value for storage temperature. In the cold storage rooms uniform air circulation should be provided, but air velocity should be lower than 0.1 m/s in the channels between the pallets in order to minimize the loss of moisture from the stems. Large diameter fan, possibly with double speed, should be installed in order to adapt air movement to temperature level and quantity of product stored. High and continuous ventilation rate are required to exhaust sulfur dioxide from room air following fumigation. The greatest change that takes place in grapes in storage is loss of water. The first noticeable effect is drying and browning of stems and pedicels. This effect becomes evident with a loss of only 1 to 2% of the weight of the whole bunch. When the loss reaches 3 to 5%, the fruit loses its turgidity and softens. Maintaining relative humidity of 92 to 95% in grape storage is often a problem especially at the beginning of the storage season when the rooms are being filled with dry lugs. Using large cooler (aero evaporator) surface that means a minimum specific surface of 30 cm2/m3 of cold storage room, with a specific power of 0.12 kW/m2, it is possible to have an optimal DT of 3°C. The use of water for defrosting the cold surface increases the relative humidity inside the storage room despite humidification increase the risk of liquid water presence on the berries surface. For this reason this defrosting technique is not advisable in cold storage rooms for grape. The most usual system to keep high grapes turgor during the long term storage is to pack the bunches in a plastic bag; in this way respiration heat removal results more difficult but relative humidity inside the bag will be close to saturation point. In order to avoid product reheating, inside the plastic bag, air velocity in the storage room have to be increased to 0, 2 to 0, 3 m/s.
Pest control at cold storage As it shown in pictures related to GOZARGAH cold storage of Mazar-e Sharif, the fungus are damage the grapes which are stored for two months. Here is some techniques to prevent from such problem for future precautions. Medium and long-term storage of table grapes is possible not only because of the improved refrigeration practices but also because of the development of effective fumigation practices to control decay. Long-keeping varieties, ie Emperor, Ribier, and Calmeria, Italia ecc. Further contribute to the long term storage of this commodity.
S02 fumigation to control decay The main fungus causing decay of grape during the storage at 0°C is Botryris cinerea Pers. This fungus is capable to grow at this storage temperature. Spores of this mould are killed by the fumigation if they are present on the surface of the berries. But if the infection started in the vineyard before harvest SO2 (sulfur dioxide) fumigation is unable to disinfect the grapes. In fact SO2 inactivates spores and reduces their growing rate, so in infected berries the mould continues the development (in relation to the storage temperature) and it could became visible in few hours after removal of SO2 from storage environment (room or single package). SO2 fumigation reduces the mould distribution inside the package due to its action on the spores and it prevents the formation of 'nests' of mouldy berries.
S02 fumigation to maintain stem condition Stem color is greatly affected by SO2 fumigation. SO2 presence in the storage room avoids stem browning and give it a light green or amber color. After long term storage stem and pedicel result much more elastic than without fumigation, so it reduces berries detachment during the transport.
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6.5. Technical feasibility conclusion (Is Taifi grapes technically feasible to export in abroad market except of Pakistan?) Phase name
Current situation (is the current situation acceptable for exporting quality)
What is the requirements? What recommendation is for improvement?
Tools
Production (growing)
- The yield of the production is acceptable,
- The product quality needs to improve to reach in quality standards (extra quality, class 1, 2 or 3)
- Using agro chemicals in not practice well and need to improve
- The current variety (Taifi) is not most welcome by markets as it is seeded variety and can't to compete with current seeded variety like American red globe variety
- Disease and insect control at the farm to have good quality of product for export
- Recognition, selecting, using and applying the agro chemicals in proper manner and techniques
- Changing the variety in long term to maximize market share
- Development of current method of production as the current method is reducing the product quality
- Conduct technical capacity building programs for farmers and district association members to increase their knowledge in new recognized growing methods, using and applying agro chemicals
- establishment of Research and Development (R&D) center
- hiring individual or firms expert in agriculture trainings development
- consultancy services to study about grape varieties in the district
- getting contact with recognized agro chemical companies to respond to the agro chemical needs and requirement for disease and insect control
Harvesting - picking process is not practicing as the export quality is need
- there is no packing house for doing this process
- packages which are used is not accepted by target abroad markets
- hygiene standards is not practiced in packaging
- picking the grapes should be based on standard procedure for exporting
- packing house needs to be established for export quality
- standard packing and packaging
- short term picking training needs to be conduct for local farmers, workers and local traders
- establishment of packing house in case of exporting to international market
- design and approving package for the products to meet the target markets requirements
- hiring individuals or consultancy service providers expert in agriculture development specially in field of grape processing
- drafting and printing manuals for farmers in picking method and packaging
- construction of pack house at the district
- contract with packaging companies and linkage with farmers to deal with the factory
Post harvesting
- available transportation system is not responding to meet abroad market requirement, there is no
- refrigerated truck and container should be use while transporting the grape to the
- lobbying with transportation companies and traders
- using current capacity of cold storages in Mazar- e sharif like GOZARGAH
43
refrigerated transportation system at the district and didn't practice yet
- there is not cold storage facility at the district and pre cooling while shipment also is not possible to do
market to keep freshness of the grape
- farmers, association, group farmers and local traders use cold storages while shipment to the abroad market
- store grapes at the cold storage and supplying when the demand at the market is high to maximize profitability
to do exporting with equipped truck with refrigerator container to export markets
- improvement culture of cold storage as a tool to increase product quality and freshness
cold storage to complete cold chain
- conduct discussion meeting between transportation companies and farmers associations or local traders
Conclusion As it clear, current Taifi grape production has not technical advantage or feasibility to export in regional markets like UAE, India or china as can not to fulfill market requirements and needs. There is not a proper growing method, harvesting and post harvesting. In all stages, capacity building and system setting needs to meet standard requirement of target markets.
Table 6.10: technical feasibility conclusion table
44
7. Financial feasibility Financial feasibility diagram
7.1. Production cost of Feroz Nakhchir grape The survey calculate the cost of production at farm gate in each villages of district through FGD and individual questionnaire of farmers. Even though, the products are harvested by trader’s employees, we included the cost of harvesting in all cost estimates to make a valid data. A majority of the information in this report came directly from our survey teams. At below table, the production is divided in three main part which are, Fertilizers and chemicals, Labor and Farm cost in vineyards:
cost analysis of table grape (Taifi variety) grown in Feroz Nakhchir district per Jerib in 2015
Costs Per Jerib Phosphorus quantity Phosphorus cost UREA quantity UREA cost IPM (Sulfur, Bordeaux mix…) Total Input Costs Labor Unskilled Labor Days Unskilled Labor Cost
50 KG 2500 AF 50 KG 1500 AF 1400 AF 5400 AF 100 Days 300 AF
Figure 7.1: Technical feasibility diagram
Financial feasibility
Cost of
production
Selected abroad
market
Transportation cost
Other direct cost
Other indirect cost
India, China and
UAE
Is these exporting financially feasible?
Yes NO
Marketing strategy have to be
developed. Review in cost of goods sold
45
7.2. Direct and indirect cost of the export grape in Afghanistan side
No Cost description Cost breakdown per KG/Afghani
Accumulated Cost
1 Package (plastic basket with separator)
19 19
2 Labor for packing, loading and unloading
1.625 20.625
3 Feroz Nakhchir municipal Tax 2500 Afs/1000 crate /14Kg=0.17
20.8
4 Farm gate-Kabul transportation cost 1.7/Kg 22.5
5 Kabul municipal tax 0.12/Kg 22.62
6 Custom clearance, loading and unloading and other paper work at Kabul airport
5.67 28.29
Total direct and indirect cost in Afghanistan 28.29
7.3. Total cost of goods sold in Afghanistan side
No Cost description Cost breakdown per KG/Afghani
Accumulated Cost of goods sold
1 Purchase of the product at farm gate 21 21
2 Direct and indirect cost in Afghanistan 28.29 49.29
Total direct and indirect cost in Afghanistan 49.29
Semi-skilled Labor Days Semi-skilled Labor Cost Skilled Labor Days Skilled Labor Rate Total Labor Costs Farm Services Rootstock (grape vine cost/20 years) Water cost Traditional trellising cost (5 years depreciation) Total Farm Services Total Costs
12 Days 500 AF 3 Day 600 AF 37800 AF 618 AF 6400 AF 12200 AF 19,218 AF 62,418 AF
4650 Kg is the lowest harvesting quantity per Jerib which means that cost of production is equal to 13.5 Afs per Kg and sale price is around 20 or 21 Afghani per Kg. Farmer return profit is 6.5 or 7.5 Afs per Kg
Table 7.1: production cost of Taifi grape at Feroz Nakhchir district
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7.4. Transportation cost to India, UAE and china
No Cost description Cost breakdown per KG/Afghani
1 Air shipment to UAE 0.65 USD/KG
2 Air shipment to India 0.6 USD/KG
3 Air shipment to China No direct shipment
7.5. Cost of goods sold to reach in Indian market
No Cost description Cost breakdown per KG/Afghani
Accumulated Cost of goods sold
1 Product cost in Afghanistan side 49.29 49.29
2 Air Shipment 40 89.29
3 Indian custom duty clearance, market charge and commission agents
Approximately 10% of product price, 4.9/Kg
94.19
Total cost for exporting Taifi table grape to New Delhi market 94.19 equal to 1.41 USD$
7.6. Cost of goods sold to reach in UAE market
No Cost description Cost breakdown per KG/Afghani
Accumulated Cost of goods sold
1 Product cost in Afghanistan side 49.29 49.29
2 Air Shipment 43.35 92.64
3 UAE custom duty clearance 4% of product price for agricultural products, 2/Kg
94.64
4 commission agents fee 7% of sales price, approximately equal to 6/Kg
100.64
Total cost for exporting Taifi table grape to Al-Aweer Dubai market 100.64 equal to 1.51 USD$
7.7. Cost of goods sold to reach in China market No Cost description Cost breakdown per
KG/Afghani Accumulated Cost of goods sold
1 Product cost in Afghanistan side 49.29 49.29
2 Air Shipment Around 1 USD$, 66.5 Afs 115.79
3 China custom duty clearance 13% of product price for agricultural products,6.37 /Kg
122.16
4 commission agents fee 10% of sales price, approximately equal to 6.5/Kg
128.66
Total cost for exporting Taifi table grape to Beijing market 128.66 equal to 1.93 USD$
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8. Human Resource Feasibility
Human resource feasibility diagram
8.1. Group farmers and other farmer's firm at the district There is just one farmer’s cooperative which has not proper address and office, it managed by Mr. Haji Qasem, the cooperative funded by government in years ago but it seems it is inactive right now. A new grape association is also established in the district at the beginning of 2016 by Mr. Dr. Nasrat, and
himself is responsible of managing the association right now14. The association established linkage with INGOs and related governmental authorities like RADP-North, NHLP and ILO organizations. It is registered with ministry of justice by financial cooperation of NHLP office and most of the meetings between members and other parties held in the association’s chief house at Charsoq village. In the grape association as shown at Figure 3.7 and table 4.7, only 28.9 % of respondents answer that, they have membership of the association. This finding shows that the awareness of the grape association is inadequate and most of the farmers had a few/no information regarding the existence of the association.
14 Dr. Nasrat contact number: 0778673829
Human Resource feasibility
ACTORS
Commercial farm owners
Cold storage owners
Noncommercial farm owners
Grape association
Middlemen and local traders
Skills, knowledge and techniques required to fulfill the job requirement
Is the Actors fulfill the job?
Yes NO
No further action in this section
- Skill and knowledge
requirement
- Proposed training to
fulfill the gap
- Capacity building
program plan
Figure 8.1: Human resource feasibility diagram
48
1.
As the research shows, the grape association doesn't have enough capacity to conduct capacity building programs, marketing efforts or any other promotional or extension program for the memberships to change the current situation of the business. The grape association strongly depends to aid organization to support them in fields of capacity building in different categories and stages, marketing approach support, research and development (R & D), finance and credit and technical advisory on the field of business promotion and extension.
8.2. Specific skills, expertise, and certification required and availability of such personnel As the research data shows, there is a huge gap in skills and knowledge of farmers, grape association management, local traders and middlemen and cold storage actors to respond the gap of knowledge and skills. The below table is tried to make a logical relation between grape value chain actors and specific skills and knowledge.
No Actors Skill and knowledge requirement Tools Output
1 Commercial farm owners
- Advance vineyard management
- Picking, packing and packaging method
- Business development training
- International marketing - cost management - Cooperative management - Hygiene control
- Trainings - On the
job trainings
- Exposure visits
- Product quality will
increase in commercial and noncommercial farms
- Variety development in long term
- Harvesting will be standardize
- Market share will be increase
- Production cost will be decrease
- farmers cooperation will be developed
2 Small and medium size farm owners
- vineyard management - Picking, packing and
packaging method - Hygiene control
- Trainings - On the
job trainings
3 Grape association
- Office management - Trainings - Enhance performance of grape association
Question: Do you have membership of grape
association?
Frequency Valid Percent
Valid Yes 99 28.9
No 243 71.1
Total
342 100.0
Yes, 28.9, 29%
No, 71.1, 71%
Table 8.1: Percentage of Farmers’ membership in grape association
49
- Organization development strategy and policy making
On the job trainings
4 Middlemen and Local traders
- Picking, packing and packaging method
- Business development training
- International marketing - cost management - cold chain management
- Trainings - On the
job trainings
- Increase cold chain maintenance
- Business development - Market share
expansion
5 Cold storage owners and technical staff
- Hygiene control - Administration of cold
storage - Technical training support - Business development
training
- Trainings - On the
job trainings
- Exposure visit
- Develop cold chain management
Table 8.2: skill and knowledge requirement by grape value chain actors
50
9. Market Feasibility Market feasibility diagram
Domestic Market
Analyzing
Customer
Market Place
Market Price
Market Channel
Market Feasibility
Abroad Market
Analyzing
Customer
Current Market
Potential Market
Market
Competitors
India, UAE
and China
Central Asia,
and regional
market
Is Taifi grape feasible in market factors in abroad Market (region) and compete with
competitors?
Yes NO
Establishment marketing strategy
to enter the markets.
- Review the product
quality
- Review the cost of good
sols
- Review the target
markets
Figure 9.1: Market feasibility diagram
51
9.1. Market channel The marketing of grapes begins when the produce leaves the farm and ends when it reaches to the final consumers. It is rather a series of important business activities that transform a farm producer’s product into a number of finished products desired by the consumer. The results indicate that 42.9% of the farmers sell their orchards to pre-harvest contractors while 42.9% of farmers market through direct sale of the produce because direct sales benefit the producers more than contract sales. And remaining 14.3% even sales their product in credit.
Responses
Percent
Payment
Method
Advance Payment 42.9%
Cash Payment 42.9%
Credit_30_90Days 14.3%
Total 100.0%
Marketing channel for table grape is a process of selling commodity at different stages, which involve a number of traders like producers, contractors, commission agents, wholesalers and retailers. The fact cannot be denied that a long chain of traders make marketing operation less efficient and more costly, as each trader in this chain has its role and share. Packing material and transportation costs are the major components of the marketing costs. Two most current practice of distribution channels observed were:
Channel 1:
Channel 2:
The survey information show, pre-harvest contract price is 40 up to 50% lower than harvesting time price due to unavailability of credit facilities for farmers while production phase.
9.2. Certification and license Regarding to current Feroz Nakhchir grape which is exported to Pakistan, no license and certification is used, because quality control and standard procedure is not used while importing to Pakistan and this is why the afghan traders interested and doing large business with Pakistan. But the below certificates and documents which is issued by Afghanistan Chamber of Commerce and Industry (ACCI) is necessary while
42.90%
42.90%
14.30%
Mean
Advance_Pay
ment
Cash_Payment
Credit_30_90
Days
Wholesalers
Pre-harvest Contractors
Commission agents
Consumers Retailers
Producers
Commission agents
Wholesalers
Producers
Consumers
Retailers
Figure 9.2: Current distribution channels
Table 9.1: .How usually payments done to the farmers?
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submitting exporting packages to abroad market. This procedure of documentation is just take in one working day or six hours.
1. Certificate of origin The procedures for obtaining the certificate of origin are:
You shall complete the FORM a Certificate of Origin, following the guidelines on the reverse of the form.
You shall present the list of goods to be exported, the commercial invoice of sale, and your trade license when making application to the ACCI at the OSS.
The fee for issuance of the certificate is Afs 50 for sukook, plus an administration fee equal to 0.1% of the FOB value of the goods to be exported if ACCI is required to assist you with the completion of the Forms.
The time to obtain the certificate of origin is estimated at one (1) hour. And there are separate certificate of origin forms for goods destined to China and the SAFTA countries.
Note: For issuance of the Certificate of Origin, the fee is Afs 50 for sukook, plus an administration fee equal to 0.1% of the FOB value of the goods to be exported.
2. Registering business invoices; 3. Pricing export commodities; 4. Transit form in case of transit of goods from countries to destination country.
And the below certificates and documents is needed before export for don’t face problem in Afghan and foreign customs.
1) Packing List which specify characteristics of a commodity 2) Quality Control Certificate and health certificate issued by ministry of agriculture and livestock 3) ACCD, Custom clearance duty 4) Filled out the Transit Form given by Transit Affairs Department of Ministry of Commerce and
Industries; 5) Bill of loading.
It depends to the exporting package destination to select one of the below type of certificate of origin while sending the materials.
1- Certificate of Origin, Form A: this form is recognized by Germany; Greece, Ireland , Italy,
Luxembourg, Netherland, Bulgaria, Sweden, Swaziland, USA, European Union, Belgium, Denmark,
France, Australia, Canada, Austria, Finland, Japan, New Zealand and Norway. Some of the countries
consider free custom duty for Afghan goods; 2- Certificate of Origin, SAFTA: this certificate is recognized by SAARC member states. India has
considered free custom duty for 480 kinds of Afghan goods in according SAFTA Agreement. Pakistan also
has considered free custom duty for 233 kinds of Afghan goods as well.
3- Certificate of Origin, Granted by China: China has considered free custom duty for 4721 kinds of less
developed countries’ goods such Afghanistan. This kind of goods should be exported to China in
correspondence the Certificate of Origin. Also importing procedure of fresh grapes when imported to
china, shall be accompanied by phytosanitary certificates issued by the plant quarantine authority of
exporting countries, stating that the fruits have been thoroughly inspected and found free from Cydia
pomonella L., or stating that the fruits have received appropriate fumigation prior to shipment;
otherwise the fruits requires appropriate quarantine treatment prior to importation.
53
9.3. Domestic market Generally, all Hussaini variety and low grade of Taifi grapes are marketed in local market including, Balkh, Baghlan and Samangan provinces while the higher grade of Taifi grapes are traded to Pakistan, mostly Peshawar Market. In domestic market, grapes also comes from districts of Balkh province such as Dawlat abad and Balkh districts and Kabul province when Shamali district harvest their grapes. Retailer price of the grapes at harvesting time started from forty Afghani (0.60 USD $) and reach to 50 Afghani (0.73 USD $).
9.4. Abroad market As interviewed by the afghan grape exporters in district and Kabul, they have not any idea and system of analyzing demand of foreign countries and potential importer countries for their products. And even they didn’t evaluate demand of Pakistan market. They are just supply their product to Pakistan market and selling in market price. They are not seeking, lobbying and negotiating for other importer countries. Traders and merchants didn’t take risk to export their grape for testing new markets. As it is possible, trust on unknown market and experiment brings huge lose for them. In other hand unreliability on products regarding to quality, packaging and transportation system is another reasons for not doing this risk.15
15 Survey result information (exporter interview)
Picture 9.3: TCSC interview with national exporters at Kabul
54
9.4.1. Pakistan Market (current abroad market analysis) Time between harvest and selling in local market is 1-2 days but time between harvest and selling in export market is 7-30 days with equipped container and standard transportation system. But unfortunately, there is no appropriate transportation system and equipment to send the Feroz Nakhchir grape into the long-way abroad market and currently, there is just Pakistan market for Feroz Nakhchir table grape in abroad. All the traders and export companies doing export Taifi variety grape of Feroz Nakhchir to Pakistan because of;
Easy access and enter to the market, Short distance, Less/no attention to the product quality and standardization Poor product processing such as; sorting, packaging and labeling Historical relationship with Pakistani traders And familiarity with exporting procedures to the Pakistan.
The below step by step procedure is used to export Afghan table grape to Pakistan by afghan traders and exporters.
1. Bargaining and purchasing product at the vineyard from middleman or garden owner and oral agreement for product price and harvesting time.
2. Trimming, packing and moving to the vehicle (open truck is use for transportation) 3. Municipal tax Clearance with income department of Feroz Nakhchir district governor, the tax
amount is 2500 Afg per truck which is mean 2.5 Afghani per wooden crate. 4. Kabul municipal tax clearance which receive 1800 Afg per truck. (1.8 Afg per wooden crate) 5. Unloading and reloading of the grape package to other vehicle for transporting to the Pakistan. 6. Tax clearance with Afghanistan chamber of commerce and industry and getting tax free paper for
exporting fresh fruit. 7. Passing from Kabul city and paying illegal money to police checkpoints. 8. Turkham border tax clearance, 7.5% of total value of the package. As it was 2.5% in last years and
suddenly it increase to 7.5% in last year. 9. Paying 5000 Kaldar commission at the border for tax clearance. 10. 25000 Kaldar illegal payment to the Pakistani police checkpoints. 11. Entering to the Peshawar market and selling the product by Pakistani wholesaler agent.
Total cost of goods sold of Feroz Nakhchir table grape at Peshawar market is around 31.54 AFN in 2015. As table below shows, costs added step by step to the product until reaching to Pakistan market.
No Cost description Cost calculation Cost breakdown per KG/Afghani
Accumulated Cost of goods sold
1 Purchasing price from farmer 1400 per Sir (7 kg) 21 21
2 Labor for packing, loading and unloading
1300 Af (tow labor wages) for 800 KG grape
1.625 22.625
3 Feroz Nakhchir municipal Tax 2500 per vehicle 2500 Afg/1000 crate /14Kg=0.17
22.795
4 Farm gate-Kabul transportation cost
25000 Afg per 1000 grape crate
1.7/Kg 24.495
5 Kabul municipal tax 1800 per 1000 grape crate
0.12/Kg 24.615
6 Unloading and reloading to other vehicle
N/A 0.15/Kg 24.765
55
7 Kabul-Peshawar transportation cost
70000 per 3000 crate
1.6/Kg 28.365
8 Commission of custom clearance on the border
5000 Kaldar/ 3000 crate equal to 3150 Afg/3000 crate
0.075 /Kg 28.44
9 Turkham custom fee 7500 Kaldar per ton
4.725/Kg 31.165
10 Turkham-Peshawar illegal payment to Pakistani police and checkpoints
25000 Kaldar per 3000 Crate
0.375 /Kg 31.54
Total cost of goods sold of Feroz Nakhchir table grape at Peshawar market in 2015 31.54 Afg / Kg equal to 0.48 USD$
It seems that finding sale price trend of Feroz Nakhchir grapes is not easy by asking from exporters and it may not be trustable as it is part of the exporter’s business secrets and they are not willing to answer.
As the season of grape harvesting in Tajikistan and Afghanistan is same, and due to transit and exporting of Taifi grape of Tajikistan to the Pakistan, selling price was between 27 and 31 Afghani per Kilogram in 2015 which it was decreased 100% scale to 2014. 16
Market prices in Pakistan continued to be lower than normal due to the large Afghan harvest and the low quality of the grapes. Shipments of fresh grape from Tajikistan and Uzbekistan to Pakistan added new volumes to the Pakistani market, providing additional competition for Afghan grapes and further pressure on prices. An unexpected increase in the Pakistani duty and taxes for Afghan fruit further reduced merchants’ profits and their incentive to push the grape deal. Even merchants stopped shipping to Pakistan on several occasions during the harvesting month to wait for the market to clear and prices to increase. However, because most of the full-time commercial Afghan fruit merchants had pre-purchased vineyards of Afghan grape prior to the harvest season, most decided to continue to ship to Pakistan in an attempt to at least recover their investments.17 Beside of all these, Afghan traders have historical experience with Pakistani side and plus of this; easy access, entry and exit from the Pakistani markets, no quality control on the border and less attention to the product quality and packaging, short distance and less refrigerated container facility in harvesting time encouraged the afghan traders to do business with Pakistan. In other hand until entering Tajikistan table grape to the Pakistani market in last year, afghan grapes had price competitive advantage in the market of Pakistan. But wholesale prices of grapes in Pakistan wholesale market, Peshawar, was between 27 and 31 Afghani/Kg and cost of goods sold of Feroz Nakhchir’s grape was 31.54 per Kilogram in 201518. the research based on interview with Afghan Taifi grape exporters shows that, Tajikistan Taifi grape quality is same as Feroz Nakhchir Taifi grape but their sale price was very low between 22.8 and 27.4 Afghani per Kilogram which clearly shows that cost of goods sold of Feroz Nakhchir of Taifi grape is higher than the wholesale price at Peshawar market of Pakistan in 2015. So Feroz Nakhchir grape had not more price competitive advantage at Peshawar market of Pakistan in 2015. So the solution for existing to the Pakistan market is decreasing cost of goods sold of Feroz Nakhchir grape while exporting to Pakistan or decreasing supply by Tajikistan and Uzbekistan (it is 16 Survey result information 17 GRAPE VALUE CHAIN PROJECT (GVCP), Grape Exports to Pakistan and India, roots of peace and TCSC survey result information 18 Survey research information
Table 9.2: Cost of goods sold of Feroz Nakhchir grape per Kg at Pakistan market (Peshawar) 2015
56
a hope for traders that, due to sanction of Russian against Turkey products including grape, Tajikistan and Uzbekistan is more interested to do business with Russian and send their product to Russia instead of Pakistan, in this case the afghan traders can sell Taifi grape in higher price to the Pakistan market due to low supply by Tajikistan and Uzbekistan).
9.4.2. Other regional Market Graph below shows the existing geography of exports of grapes, the typical case of a commodity supplying mainly regional markets. The main export partner is Pakistan, having imported 18,555,508.00 USD in grapes during three years (2013-2015) and 87.81% of total exports. Exports have also occasionally flown to other regional countries such as India and UAE as the graph shows.
Year Export to Pakistan/KG
% Share of export to
PAK
Export to India/KG
% Share of export to
IND
Export to UAE/KG
% Share of export to
UAE
Total
2013 13900892 64.45 7666508 35.54 1600 0.01 21569000
2014 8643656 99.87 4000 0.05 6921 0.08 8654577
2015 8104286 99.12 66849 0.82 4780 0.06 8175915
Total 30648834 7737357
13301
38399492
Total % share
87.81333
12.13667
0.05
100%
Table 9.3: Current export market of Afghanistan grapes’ share in the region
0
2000000
4000000
6000000
8000000
10000000
12000000
14000000
20132014
2015
13900892
8643656
81042867666508
400066849
16006921
4780
Exporting partner of Aghanistan grape 2013-2015
Pakistan India UAE
Figure 9.4: Exporting partner of Afghanistan grape (2013-2015)
57
1.
9.4.3. Matrix of analysis for regional market Grapes are one of the top 20 agricultural commodities produced worldwide. In 2015, Chile was the largest grape exporter, with 15.9% of the global market share. During the same year, 80.3% of the grapes exported globally were from Chile, USA, China, Italy, Peru, Netherlands, South Africa, Turkey, Spain, and Egypt. Among importers, USA (15.6%), Netherlands (9.3%), UK (8.9%), Germany (8.1%) and China (6.3%) are the leaders. The USA alone traded grapes of value USD 11.55 million during 2014-2015.
By consumption, Italy, France, Spain, United States and Argentina are the global leaders. These countries are also the largest wine producers globally. But the question is; what is market share of Feroz Nakhchir table grape in world table grape trading? And where is potential markets for Feroz Nakhchir table grape?
At the first stages, TCSC staff started analyzing of Asian countries with focusing on factors of; consumption, price, market mechanism, harvesting calendar and imported volumes of grape in last years which is shown as below.
Total values of exporting grape to abroad market 2013-2015
Year Export to Pakistan/USD
$
Export to India/ USD$
Export to UAE/ USD$ Total / USD$
2013 4396668 2125852 480 6523000
2014 7779290 3600 6229 7789119
2015 6379100 54726 4302 6438128
Total $/Country 18555058
2184178
11011
Table 9.4: Total values of exporting grape to abroad market (2013-2015)
20132014
2015
4396668
7779290
6379100
2125852
360054726
4806229
4302
Export to Pakistan/USD$ Export to India/ USD$ Export to UAE/ USD$
Source: Central statistic of Afghanistan Figure 9.5: Total values of exporting grape to abroad market (2013-2015)
58
آمارنامه کشاورزی ، جلد سوم : محصوالت باغبانی ، سال 3131 )ایران( 19 گزارش صادرات و واردات بخش کشاورزی سال 3131 )ایران( 2021 http://www.spring.gov.sg/archives/etac/documents/iran.pdf 24 http://moci.gov.af/en (export information page) 25 Survey result 26 Survey result
No Country name Advantages of exporting Disadvantages and difficulties of exporting Grape market price
Recommended for further research
1 Iran No advantage identified
It is a self-supplying country in fresh table grapes production(3,049,873 ton19 grape is produced in 2013-2014;2,924,728 ton is domestic consumption and 11,767 ton of fresh table grapes has exported in 2013-2014 / 113,378 ton of raisins has exported in 2013-2014)20
Same harvesting time
No price competitive advantage for Afghanistan, as the retailer price index of grape is around 33 Afs/Kg.
Tough procedure of importing ( preparing following documentations; exporter’s license, certificate of origin, health certificate, import permit, commercial invoice, bill of lading, pro forma invoice and Etc…..21
33 Afs equal to 0.49 USD$
Not Recommended
2 Pakistan Have enough business conditions knowledge; we have more than 20 years’ experience in exporting
Current largest importing country for target fruit,
There is 35% tariff rate for fresh grapes.24
No competitive price; last year the retail price of the grapes in Pashawar was less than COGS of Feroz Nakhchir’s grape for exporters.25
Rising Tajikistan as new competitor which makes the market price unstable.26
Started from 27 Afs (2015 data) equal to 0.40 USD$
Recommended with conditions: - Reducing COGS - Reducing chain of
middleman and exporters
59
22 Central statistic organization of Afghanistan 23 Survey result 27 Same as above 28 Same as above 29 http://moci.gov.af/en (export information page)
about85% of grapes export to Pakistan.22
Nearest abroad market (Less than 2 days, the packages arrives to Peshawar from Feroz Nakhchir.)
Easy access to market due to unchecking of quality control, packaging standards and laboratory tests for importing.23
Increasing Tariff of importing by Pakistan.27
Illegal payments for checkpoints entire the Pakistan.28
Unstable political situation between Afghanistan and Pakistan which sometimes has direct effect on trading between two countries.
- Increasing role of farmer associations and farmer’s group
- Reducing illegal payment entire the Afghanistan and Pakistan while exporting
- Setting market promotion strategies
3 Kyrgyzstan Grape production is not well- developed, the climate being unsuitable, the productivity of fresh grapes is fallen (2013).13
Kyrgyzstan Republic-Tajikistan- Afghanistan –Iran (KTAI)s’ presidents signed an agreement to develop the (KTAI)’s railway project during fifth trilateral submit in Dushanbe on March 25,2012.13
Most imported grapes in Kyrgyzstan markets came from Tajikistan. Tajikistan has fresh grapes with low price almost the price of grapes in Kyrgyzstan is the same as Tajikistan.13
Started from 0.19 USD $ and reach to 1.52 USD $
Not recommended
4 Uzbekistan No advantages identified There is 60% tariff rate for fresh grapes.29
Uzbekistan is the largest table grape producer in central Asia and one of the leading fresh grape exporters in the region (exported 44000 tons fresh grapes and 30000 tons raisins in 2013). Total grape production is estimated preliminarily at 1.32 million tons and 73% of grape crop is
Around 1 USD $ Not recommended
60
30 Uzbekistan fresh deciduous and stone fruits- Gain report number:UZ4001, (2014) 31 UNDP- AKT AGRO-Food Feasibility study draft main report (2015) 32 http://phytosanitarysolutions.com/republic-of-china/ 33 : Zhusheng Dong, 1992 34 http://moci.gov.af/en (export information page) 35 National research Centre for grapes in India,2013 37 Indian market research 2016
consumed fresh, 23% is produced domestically and the remaining 4% is exported.30
5 Tajikistan No advantage identified Tajikistan produce 175335 tons fresh grapes in 2013, its productivity is growing up and the export value was 0.837 million dollar.13
Retailer price of fresh grapes 0.19-1.53$/kg31
Not recommended
6 China Has competitive price; per kg 2.62-4.92$ in China and the production cost of Feroz Nakhchir’s grape is 0.27$.
No tariff
Afghanistan and china both are the member of WTO which facilitate procedure of trading
High demand of laboratory test and certificates;
High importing procedure fresh grapes when imported, shall be accompanied by phytosanitary certificates issued by the plant quarantine authority of exporting countries, stating that the fruits have been thoroughly inspected and found free from Cydia pomonella L., or stating that the fruits have received appropriate fumigation prior to shipment; otherwise the fruits requires appropriate quarantine treatment prior to importation.32
Same harvesting time33
2.62-4.92$ / Kg Recommended for further research and study
7 India No tariff is for fresh grapes.34
Supply in Delhi decreasing in September and October and the price is getting higher than the other months, and it is the time which Feroz Nakhchir grape is harvesting the Taifi grapes.35
Plant & Plant material are allowed into India after the Import (Pest) Risk Analysis. The pest risk analysis has been made mandatory for all the plants/plant material prior to its import into India as per Clause 3(7) of the PQ Order, 2003. The risk of exotic pests and diseases is minimized by identifying the potential pests which can
1.52 USD $ based on report issued by USAID report, but Red globe retailer price is 300 Ruppe Hindi (4.5 USD$)37 based
Recommended for further research and study
61
36 http://phytosanitarysolutions.com/brief-on-imports-into-india/ 38 www.indexmundi.com 39 http://www.kz.all.biz/en/grapes-bgg1056485
It has a big market for grapes consumption; it is the second crowded country in the world.
About 14.5 % of fresh fruits trading is with India, and the exporters get experiences and knowledge about India’s market.
Presently, a total of 61 entry points including 34 seaports, 12 airports and 15 land custom stations are notified points of entry for import of plants and plant material. Besides, 60 Inland Container Depot/Container Freight Station,
get into the country with the specified commodity and seeking certification of their freedom/pest free area status, etc. from the exporting country.
Procedure for Import Quarantine Clearance: import permit, PSC, certificate of origin, invoice, packing list, shipping/ Airway Bill, Customs Bill of entry to the respective Plant Quarantine Station.
The samples are subject to detailed laboratory testing to ascertain freedom from exotic pests.36
on our research from Delhi market at Aug 2016
8 Kazakhstan No tariff rate for fresh grapes.15
In this country grape consumption is grow up, in 2015 it reach to 100000 MT, also the fresh table grapes import was 100000 MT which means this country is highly depends to grape imports from others.38
All region countries have imported grapes to Kazakhstan such as Uzbekistan, Tajikistan, China and some European countries so the sale price is low.39
Procedure of importing to Kazakhstan: required 1.export good picking list in the company form which includes all details about the goods 2.Invoice by ACCI 3.Certificate of origin 4.Phytosanitary certificate by MAIL.15
0.5 USD $ Not recommended
9 Russia Local opportunity has because they make ban in trading with European
Same harvesting calendar
Has Laboratory test for pesticide
0.56 $/Kg Not Recommended
62
40 Survey result 41 Russian Federation, Food and Agricultural import Regulations and standards-Narrative (2009) 42 http://webemirates.com/marketplace/grapes-red-423144
countries and some other countries.
Production cost of Feroz Nakhchir grapes is 0.27$,40 and production cost of grapes in Russia is 0.56$, so it shows we can get profit if we use this opportunity.
Procedure of importing(Permission from VPSS, A product certificate issued by the appropriate Russian certification establishment, to complete this level the following documents are necessary: Signed contract and transportation documents, Certification of origin, phytosanitary certificate from the exporter, quality certificate, importer’s license, certificate of conformity.) also need safety certificates issued by several laboratories before they enter Russia.41
10 UAE We have trade with UAE, about 0.5% of total shipment of Afghanistan is table grape
The fresh grapes price of best type in Dubai is 17 AED (4.6$) per kg.42
Has high standards for importing fresh fruits
Has laboratory test for pesticide (Food safety clearance)
Has small fruit market
17 AED (4.6$) per kg
Recommended for further research and study by using primary data
63
9.4.4. Deep investigation and further research in selected abroad market After filtering 10 countries in central Asia by considering; Market price, accessibility by road or Air, Tariff and exporting difficulties indicators, three countries selected for further research and study through visiting the markets of these countries by TCSC consultants.
India, UAE and china selected for this issue based on the mentioned indicators and the result of the visiting the countries reflected as market feasibility for Taifi variety of the Feroz Nakhchir district.
9.4.4.1. India The majority of exported grapes from India consist of Thompson seedless variety. Clusters are medium to large, cylindrical to conical shaped, heavily shouldered. The berries are seedless, small to medium sized, oval to ellipsoidal in shape, soft berry skin and greenish white to golden in color with firm, juicy pulp. Major table grape varieties in India are Thompson seedless and its clones, Manjri Naveen, Red Globe, Fantasy seedless, Flame seedless, Sharad seedless, Crimson seedless, Autumn Royal, Autum seedless and Blush seedless.
Varieties in demand in international markets include Thompson Seedless, Emperor, Ruby Seedless, Red globe, Christmas rose, Crimson Seedless, Calmeria, Rouge Ribier, Exotic, and Fantasy Seedless. Several varieties such as Thompson Seedless, Flame Seedless, Shared Seedless, Tas-A-Ganesh and Sonaka, which are currently in demand in the international markets, are produced and exported from India. However, seeded varieties that are demanded in USA and Italy markets are not produced in India. To tap this potential, there is demand in need of seeded varieties of grapes of India to re-export.
Indian market grape price
During late of Aug and Sep, grape supply in Delhi Markets is very low due to finishing harvesting of Indian vineyard but mentionable that, Indian grape supply started again from October. Grapes comes to these Indian markets from US and Afghanistan which makes grape price in high level in these months. Wholesale prices of grapes in New Delhi wholesale markets which is important for exporting of afghan grapes variety are: The minimal wholesale price of seedless grape in Sep, Oct and early of November in New Delhi started from 200 Indian Rupees (3 USD) while the high price average is reaching to 220 Indian Rupees (3.3 USD$).
No Date of Visit
Type of variety Wholesale price
Picture of grape
1 5 Sep Shundulkhani variety (Afghani seedless grape)
200 Rupees (3 USD $)
64
2 27 Oct Seedless black variety (Extra class)
220 Rupees (3.3 USD$)
3 7 Nov Seedless green
variety (1 class) 120 Rupees (1.8 USD$)
Table 9.5: New delhi seedless grape variety wholesale price
The wholesale price of seeded variety started from 130 Indian Rupees (1.9 USD$) and reaching to 350 Indian Rupees (5.2 USD$). The above grape market price is taken during Sep, Oct and early of the November of 2016, it is mentionable that the interview by Indian importers show, market demand is high in seedless variety comparison to seeded variety and customers willing to purchase and deal seedless variety. The Afghan seeded variety has minimal price of the market and American red globe seeded variety has the highest price at the market so exporting to Indian Market seems that be feasible.
No Date of Visit
Type of variety Wholesale price
Picture of grape
1 15 Aug till 5 Sep
Red Globe (seeded variety)
300 up to 350 Rupees (4.5 to 5.26 USD $)
65
2 5 Sep Seeded variety of Afghani grapes (3 class)
130 Rupees (1.96 USD)
Table 9.6: New delhi seeded grape variety wholesale price
Indian market mechanism
The producers sell the fruit either to the pre-harvest contractor or to the wholesaler through an agent with these middlemen sharing profit. The responsibility of harvesting, packing, transportation and marketing vests with the contractor to whom the produce is sold on the basis of price agreed for unit weight of the produce or without weighing for a mutually agreed price.
Co-operative grape marketing societies are in existence in many grape producing states of India. The advantage of marketing by producers’ cooperative are:
Reduction in the price gap by avoiding the commission agent and wholesaler; Regulate supplies to different markets; and Minimize marketing problems arising out of unhealthy competition among producers.
Two channels of selling grapes exist in the international markets viz.,
1. Through producer’s co-operatives who collect, pack, cool, transport, market it abroad and share the profit with the growers and
2. Through traders who purchase, pack, pre-cool, store and then ship these in refrigerated containers to overseas markets.
But in import cases: The importers are responsible for selling the product with their commission agents which is 5 to 7% of total sales value. In this case there, the commission agent has not any obligation regarding other cost such as transportation from airport, cold storage and others and in case of taking these costs, the commission fee will reach to 10 to 12% of total sales cost. Here is some business cards of Indian traders who are willing to do business for afghan grapes.
No Name of commission agent
Visit Card
1 Mr. Rajesh Kumar
66
2 Mr. Mani Ram Kumar
3 Mr. Harish Kumar
Table 9.7: some fruit importer at new Delhi market
Indian market competitors for Taifi grape of Feroz Nakhchir district:
Like other abroad markets, New Delhi market demand seedless varieties but some seeded varieties supplying in the market like American red globe which is famous American variety in the world and selling with best price but no other seeded varieties seen during our study and research in the market except of an afghan seeded variety which is sold with less price (1.5 USD$)/Kg. so Taifi variety of Feroz Nakhchir could be present in the New Delhi market and compete with extra class of seedless varieties and American red globe variety. Forecasting price for Taifi grape variety in New Delhi market is difficult and depends to a pilot exporting to this market and testing the market for this variety.
Estimation of cost of goods sold of Taifi Variety in New Delhi market
No Cost description Cost breakdown per KG/Afghani
Accumulated Cost of goods sold
1 Purchasing price from farmer 21 21
2 Package (plastic basket with separator)
19 40
3 Labor for packing, loading and unloading
1.625 41.625
4 Feroz Nakhchir municipal Tax 2500 Afs/1000 crate /14Kg=0.17
41.8
5 Farm gate-Kabul transportation cost 1.7/Kg 43.5
6 Kabul municipal tax 0.12/Kg 43.62
7 Ariana cargo 0.6$/Kg, 40 Afs/Kg 83.62
8 Kabul Airport custom duty and clearance
85$/Ton, 5.65 Afs/Kg 89.27
67
9 Indian custom duty clearance, market charge and commission agents
Approximately 10% of product price, 4.9/Kg
94.19
Total cost of goods sold of Taifi grape in Indian Market / Kg 94.19 Afs/Kg equal to 1.4 USD$
Minimal seeded grape variety wholesale price of New Delhi market for is around 1.96 USD and estimation cost of goods sold of Taifi grape to reach in New Delhi market is 1.4 USD so profit margin for exporter is only 0.56 USD $/Kg, mentionable that product rejection and lost is not considered in calculation and incase of adding 10% product lose and damage, the profit margin of exporter decrease to 0.42 USD$/Kg which may be acceptable for exporter.
Indian market feasibility conclusion
As it clear, the profit margin of exporter is 0.42USD/kg and could be acceptable for exporters, minimal market price is higher than the cost of goods sold in New Delhi of India so it seems that, this market is feasible in high demand of Delhi market (Aug, Sep and late of Oct) but in case of reduction some costs related to Afghanistan side such as transportation, government fee and etc this market could be an ideal market for exporters.
9.4.4.2. United Arab Emirate Afghanistan currently have export table grape to this country based on central statistic organization data and it means that afghan fresh grape have capability of export to this country. The only way for shipment of grape to UAE from Afghanistan is by air shipment which is costly and will increase cost of goods sold of the product in targeted markets. Al Aweer is the largest and center of fresh fruit and vegetable in Dubai, it has high standard of infrastructure such as equipped refrigerator vehicles, cold storages, loading and unloading systems. The most traders, importers are from India, Iran and some others from Pakistan and they are working based on companies brand and name for example; the traders are most willing to do deal and business with Indian and Iranian and recognized international companies in importing fruit and vegetables.
UAE market grape price
Wholesale price in the market for grape started from 4.1 AED (1.1 USD$) and reach to (1.6 USD$). The most delicious variety in this market is seedless variety and only American red globe variety seeded variety exist in the market with 1.45 USD$ price. Iranian seedless grape richly cover the market with great quality.
Figure 9.6: Al-Aweer central fruit and vegetable market, Dubai, UAE
68
No Date of Visit
Type of variety Wholesale price
Picture of grape
1 28 Oct to 5 Nov
Red Globe (seeded variety)
1.45 USD $
2 28 Oct to 5 Nov
Seedless green variety
1.1 USD
28 Oct to
5 Nov Iranian seedless variety
1.38 USD$
Table 9.8: UAE grape wholesale market price
69
UAE market mechanism
In case of importing to UAE: There is high standards of entry the food staff to the UAE and all food staff must pass the laboratory test of toxin existence in the foods. It will be done at airport and in case of rejection, the package will be dispose or rejected by the exporter's charges and incase of passing the package from the laboratory, it will be allow to supply in the market. Food staff rules and regulation entry to the UAE separately added to this report. Importer companies are responsible for selling the product with their commission agents which is different and starting from 5 to 7% of total sales value. Here is some business cards of Indian traders at UAE who are willing to negotiate for further business trading of afghan grapes. The research shows, based on interviewed with some importers in UAE, as the afghan grape is unknown for most of consumers and traders, it is difficult to take share of the market for Taifi variety.
Visit Card
Picture 9.7: visit cards of UAE traders who are willing to do business with Afghan grape exporters by commission
70
Estimation of cost of goods sold of Taifi Variety in UAE market
No Cost description Cost breakdown per KG/Afghani
Accumulated Cost of goods sold
1 Product cost in Afghanistan side 49.29 49.29
2 Air Shipment 43.35 92.64
3 UAE custom duty clearance 4% of product price for agricultural products, 2/Kg
94.64
4 commission agents fee 7% of sales price, approximately equal to 6/Kg
100.64
Total cost for exporting Taifi table grape to Al-Aweer Dubai market 100.64 equal to 1.51 USD$
Minimal wholesale price of Al-Aweer, UAE market is around 1.1 USD with 1 class quality and estimation cost of goods sold of Taifi grape to reach in Al-aweer market is 1.51 USD so there would be no profit margin for exporters, mentionable that product rejection and lost is not considered in calculation and incase of adding 10% product lose and damage, the profit margin of exporter decrease to 0.15 USD$/Kg and cost of goods sold will increase up to 1.66 USD $.
UAE market feasibility conclusion
There would be no profit margin for exporter in case of exporting Taifi grape to UAE markets and they will be face with lose so this market is not feasible for exporting Taifi grape variety.
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9.4.4.3. China As we know China has the biggest population in the word thus it has huge markets, especially for fresh fruits. China’s imported fruit market witnessed steady growth, both in terms of total import volume as well as import value in the past several years. The first and most important step for foreign traders to export fresh fruits to china and access to Chinese market is to determine whether the fruit and the country of origin is included among the list of permitted imported fruits into China. The list published on February 2016 by AQSIQ (The General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China) and only 39 countries are allow to import specific fruits to China, unfortunately Afghanistan is not on the list of countries that allows to directly import fruits to China so the traders need to start to initiate bilateral discussion between Afghanistan government and Chinese officials, best way is to negotiate with them through the Afghanistan embassy in China. However there is another way to import fruits to China if the country and fruit is not on the list of granted market access to China, this way is through Hong Kong it calls Grey Channel, means partially legal/partially illegal this way has its own advantage and disadvantages but totally it is more risky for Afghan traders. Following to that, there is no direct and legal way of importing fruits from Afghanistan to China, however there are some traders they are exporting fruits from Afghanistan through Pakistan by the name of Pakistani fruits, and usually they are importing to those Chinese cities with the big ports such as Hong Kong, Shanghai and Guangzhou.
China market grape price
China which is one of the largest country with biggest population has different seasonal calendar with good fruit storage facilities that make the price trend about constant during the off seasons. Usually the seasonal calendar for table grape in china is late May to mid-October months which grapes are produced and sale to market. Grapes are the number five fruit consumed in China after apples, bananas, watermelon and citrus, according to a recent market survey. Flavor, color, and freshness are the top factors that consumers care about. Specifically, Chinese consumers prefer sweet and seedless grapes. The majority of consumers also prefer red grapes. Most grapes cannot endure long periods of cold storage so growers make every effort extend the growing season. The whole sale price for seedless grapes during the season starts from 0.80 $ to 2.3$ per kg but actually it refers to the variety of the grapes and usually the imported grapes price sometimes are double and triple in China market in off seasons. The following table are the average whole sale price of different varieties of grapes during the season in China:
No Date of Visit
Type of variety Wholesale price Picture of grape
1 Red grape 0.86$-1.73$ N/A
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2 Nov 2016
Black grape 2.31$-4.62$
3 Shanxi red
grape 0.86$ N/A
4 Yellow grape: 2.31$
Table 9.9: china grape varieties wholesale market price
In China market mostly the consumers are not much interested seeded variety grapes, beside the whole seller and buyer are not dialing much with seed variety grapes. In the other hand as the majority of grapes are produced and sale for the wine manufacturing companies, so they are not using seed variety grapes for their production purposes.
China market mechanism
Government of China provide different types of subsides to the grapes grower there for the formers mostly sale to the government or they sale their products to the wine manufacturing companies during the harvest. Specific variety of grapes like yellow honey grapes and black grapes which they have specific characteristics; which taste sweet and intense, but they also have a strong jasmine fragrance and they can be stored for the period of one month.
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The dealer company which are visited by TCSC are listed as below: 1: Brand Name: fresh fruit red grape Contact Person: Ms. Alice Su Address:Hubin North road, Xiamen, China Company Name: Xiamen Rainbow Fruits Co., Ltd Operational Address: Rm. 601, Xinhua Building, No. 152, Lianyue Rd., Siming Dist., Xiamen, Fujian, China Website:http://www.rainbow-fruits.com 2: Qingdao Sanfeng Fruits Storage and Transport Co., Ltd Fruits: Fresh Apples, Fresh Bananas, Fresh Carambolas, Fresh Grapefruits, Fresh Grapes, Fresh Kiwis, Fresh Lemons, Fresh Mangoes, Fresh Melons, Fresh Nectarines, etc Address: 7# Jinzhou Rd. Meihuashan Development District Zip/Postal code: 266623 City/Region: Qingdao Country: China Tell: +86 532 8741 2211 Website: www.sf-fruit.cn 3: Imton import trade Co.,Ltd Website: www.impton.cn Tell: +86 400-900-6136
Address: Shanghai City浦东新区张杨road 3611号金桥国际商业广场6
4: Yiguo Website: www.yiguo.com Tell: +86 400-000-7788, +86 021-52199161 Email: [email protected]
Address: 上海市长宁区金钟路999号c幢6楼
List of some marketing companies which are doing marketing fresh fruits:
1: Name: 水果营销有限公司 (Fruit marketing company Ltd)
Tell: +86-0717-3450197
Address: 中国 湖北 宜昌市 湖北省 当阳市 王店 (China, Hubei province, Xuan Chang city)
2: 农夫果园水果销售有限公司 (Agriculture Fruit Garden marketing company Ltd)
Address: 中国 浙江 台州市 玉环康育路游泳馆对面 (China, Zhejiang province, Taizhou city)
Tell: +86-0576-87212573 Website: http://www.11467.com/taizhou/co/100683.htm
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The best marketing company in any field of trade for any Afghan organization before going to China is Alibaba site which they can easily deal with and can market their products and can find dealer for it.
China market competitors for Taifi grape of Feroz Nakhchir district:
Based to the latest estimation which government of China done; the total grapes production in China during the year 2015-2016 is about 9.6 million tons from 800,000 hectares of land. Beside production China is one of the biggest importer of grapes and mostly import grapes from two countries of Chali and Peru which are good in quality and in volume of import. China also have free trade agreement with Peru country and the rate of trade for Peruvian traders become zero during this year. Based to this agreement and information we have from China market the Taife grape or any other grape from Afghanistan is not price competitive to China market. In any case we want to export we should consider the following tips for exports.
Points to be considered in packing and branding products exporting to China;
Packaging It must be in conformity with medical and safety regulations. Packaging materials must not be poisonous or dangerous and must be easily degradable and recyclable. All wood packages should carry an IPPC mark, or they will be subject to further requirements. Languages Permitted on Packaging and Labeling
All products sold in China must have their labels or notes in Chinese. Unit of Measurement
The metric system is used in China, but Chinese measuring units are also used. Mark of Origin "Made In"
Information on the country of origin of the product must clearly be indicated. Labeling Requirements
Name and address of the distributor registered in the country. Specific Regulations
Labels for fruits products must contain the net weight, the address of the Chinese distributer, the date of production and the expiry date. The General Administration of the RPC Condition for the Supervision of Quality, the Inspection and the Quarantine (AQSIQ) must be competently handled by the labeling management. All wood packages should carry an IPPC mark, or it will be subject to further requirements. Products requiring the China Compulsory Certification CCC mark, in addition to undergoing an application and testing process, must have the mark physically applied on products before entering or being sold in China.
China market feasibility conclusion
No Cost description Cost breakdown per KG/Afghani
Accumulated Cost of goods sold
1 Product cost in Afghanistan side 49.29 49.29
2 Air Shipment Around 1 USD$, 66.5 Afs 115.79
3 China custom duty clearance 13% of product price for agricultural products,6.37 /Kg
122.16
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4 commission agents fee 10% of sales price, approximately equal to 6.5/Kg
128.66
Total cost for exporting Taifi table grape to Beijing market 128.66 equal to 1.93 USD$
As the harvesting calendar of some regions in china is the same with Taifi variety of grape in Afghanistan, the grapes price started from 0.88 USD and estimation cost of goods sold of Taifi grape to reach in china market is 1.93 USD. Mentionable that product rejection and lost is not considered in calculation and incase of adding 10% product lose and damage, the profit margin of exporter decrease to 0.19 USD$/Kg which may be bring more lose for exporter company.
Plus of this, Afghanistan has no agreement with China to export fresh fruit to this country and this is the main problem of exporting fresh fruit to this country. So no profit margin for exporter, no exporting allowance from Afghanistan to china, and 13% fresh fruit custom duty tariff makes this market for Taifi grape unfeasible
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10. Conclusion and recommendation:
10.1. Conclusion
The feasibility study was conducted to determine possibility of exporting Taifi grape variety of Feroz Nakhchir district to the abroad market except of Pakistan which is current abroad market of this variety in abroad.
The study focused on the four core elements named as; financial feasibility, technical, human resource and market feasibility. Each of these elements separately resulted and specific recommendation proposed for each of incompetence factors to reach us for targeting, finding and exporting to the new abroad market.
Tanin Consulting service company consultants worked on different aspects (domestic and abroad markets) to identify constraints and limitation beyond exporting to abroad market except of Pakistan. And indeed Afghanistan as a developing country has a lot structural and operational problems and limitations to do exporting against other strong competitors in this industry but Tanin consulting Service Company have a clear and concrete recommendations to overcome of this constraints and making an alternative instead of Pakistan.
Indeed the important part is financial feasibility which will be guarantee profit margin for exporter or the company who are willing to export the product, in this regard the market price of the table grape is important to collect and compare with the cost of goods sold of the product while reaching to the target markets. For this purpose, all information of market for those countries which are located in central Asia and in the region was gather and after analyzing, those countries which have acceptable market price to at least cover the cost of goods sold (COGS) was selected to do further research by direct visiting and observation of the market and deeply investigation regarding to real market price, packaging standards, cargo and shipment and etc.
The primary analyzing shows that we are not financially feasible for exporting to Kyrgyzstan, Kazakhstan, Russia, Tajikistan, Uzbekistan, Iran because of; low wholesale market price while Feroz Nakhchir product season and unavailability of transportation route in reaching to these markets. United Arab Emirate, China and India was selected to deeply investigation as the primary research shows that wholesale market price at these countries are higher than the other Asian markets and also there is potential demand for the product. In addition, Afghanistan are currently exporting grapes to India and UAE and also there is transportation route to send the product to these markets.
Tanin consulting service company starting deep investigation for finding market opportunity for Taifi variety grape in China, UAE and India by sending its staff to these countries to discover wholesale market price during harvesting calendar of Feroz Nakhchir district, transportation route, taxes, direct and another indirect cost and resulting the exporter profit margin for each of the countries business model.
After the investigation and analyzing, the information revealed that, we are not financially feasible to UAE. As the cost of goods sold to reaching to this market is higher than the expecting selling price in the market (details are shown at the report body, financial feasibility section)
China is not further more feasible as the Afghanistan has no any agreement code to export fresh fruit to this country so until fulfillment of this duty by the Afghanistan government, Afghan exporters couldn’t
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export fresh fruit to China. In other hand, after calculating china tariff to cost of goods sold of the product, profit margin of the exporter decreases to the zero which makes this business model (china) unfeasible.
Tanin data shows that, India market is feasible to export Taifi variety of the district. The result also shows that the lowest profit margin of exporter in case of exporting grape to New Delhi market by Air would be around 0.5 USD$/Kg which is a considerable profit margin for exporters, So a market opportunity was identified.
Exporting grapes to Indian Market financial analysis
No Cost description Cost/price breakdown per KG/Afghani
A) Calculation of cost of goods sold to reach in Indian market
1 Purchasing price from farmer 21
2 Package (plastic basket with separator) 19
3 Labor for packing, loading and unloading 1.625
4 Feroz Nakhchir municipal Tax 2500 Afs/1000 crate /14Kg=0.17
5 Farm gate-Kabul transportation cost 1.7
6 Kabul municipal tax 0.12
7 Ariana cargo 0.6$/Kg, 40 Afs/Kg
8 Kabul Airport custom duty and clearance 85$/Ton, 5.65 Afs/Kg
9 Indian custom duty clearance, market charge and commission agents
Approximately 10% of product price, 4.9/Kg
Total cost of goods sold of Taifi grape in Indian Market / Kg 94.19 Afs/Kg equal to 1.4 USD$
B) Estimation of selling price Lowest expected seeded variety price index in 2016 1.96 USD$
C) Profit and loss Profit margin of exporter 0.56 USD $/Kg
The study finds out a wide range of constraints and limitation to this industry in Feroz Nakhchir district but the important constraint which makes the product technically unfeasible are;
1- Incompetency of vineyard management especially in fields of using agro chemicals (sulfur) and fertilizers (especially GBA and iron fertilizer) which makes level of toxicity of the product is higher than the accepted standards while exporting to abroad and using hygiene standards while packaging and packing.
2- Traditional sorting and packaging of the product which is not acceptable by the abroad markets, the current available package for packaging is just wooden crates that is not desirable by abroad markets. Desirable packaging discussed in detail in technical feasibility part of this report
3- Unwillingness of the exporters to do export of Taifi variety grapes of Feroz Nakhchir to abroad except of Pakistan and testing new markets due to risk of loses
4- Weakness of farmers groups and grape association such as unfamiliarity with paper works of exporting and exporting procedure, practical experience and some financial limitations makes these firms unable to act as exporters and doing export their products to abroad market and
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increasing their income through elimination of one or two value chain actors (exporters and middlemen)
5- Production of just two seeded varieties (Taifi and Hussaini) in the district which are not most welcoming by the abroad fresh fruit market. The first desirable and demanded varieties for the purpose of using as fresh grape are seedless varieties that are not producing in the district.
10.2. Recommendations
After domestic and abroad study, Tanin consulting Service Company resulted that by applying below recommendations, grape industry in Feroz Nakhcir will be compatible to be present at Indian market. This would be the route of succession of making an alternative for Pakistan market in long period of time. In other hand by applying these points, it is expected that Feroz Nakhchir grape get the higher price in domestic and Pakistan market due to increasing quality and standards of the product which makes this industry profitable for different business actors.
1. The window of opportunity for exporting to India is just open in Sep, Oct and early of the Nov while domestic supply in India is stopped and the time of harvesting Taifi grape starting at the district. So finding, working, encouraging and supporting local individual exporters, grape association and companies is necessary to have pilot export to India in next season. But as the business actors may not willing to do such a risk, Tanin Company suggest to use encouragement tools such as cost share agreement to make them willingness for exporting to India. In this regard, two or three commercial vineyard expected to select and technically support them in production, harvesting, sorting and packaging issues especially in using agro chemicals and fertilizers to ensure that the products are technically feasible for exporting. After all, one or two ton grapes pilot exporting to India have to be done by the selected business actor and result shows and presented to the other business actors to take part in the business in future.
2. Using available cold storage of Mazar-e Sharif city such as GOZARGAH cold storage and linking farmers or group farmers to increase profit margin of the farmers, grape association and other business related actors. This will help them to be present at the market in off season and selling the product in higher price when the supply is stopped by the other suppliers. Mentionable that, the study result shows, the current Cold storages needs to be further support to do working in appropriate and desired manner so cold storage administration, hygiene training, technical assistance for the cold storages are needed to improve cold storage affectivity.
3. The study is also shows that, most of the seeded variety is used in wines and beverage companies to produce secondary products from the grapes which makes the grapes production in high level in the world. So linking the farmers, selected commercial vineyards and other related business actors to fruit juice making companies is also necessary to use the second or third sorts of the products in the factories for the purpose of making grape juice and other secondary products. By this strategy, some sort of the Feroz Nakhchir district grapes can be sold to these factories and prevent from loses when the product harvesting is in high level.
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4. This is the fact that grape seeded variety is not most welcoming to the fresh fruit markets in the world and consumers interested to purchase and use seedless variety scale to seeded ones. And it is the cause of higher production of seedless varieties for the purpose of fresh grape consumption in vineyards. Meanwhile the survey result shows that, the district is not producing any seedless varieties for the purpose of supplying to the fresh fruit markets. Changing Hussaini and Taifi variety which are two most cultivated varieties in the district to seedless varieties could be an advantage in abroad market. For this purpose, it is recommend to improve capability of the current grape research center located in Dehdadi district of Balkh province, agriculture faculty of Balkh and Samangan universities or any other research institute and/or establishment of new one at Feroz Nakhchir district to study on the varieties which be suitable for cultivation in Feroz Nakhchir vineyards and technically support the district farm owners to change the varieties to the seedless varieties in a period of time.
