Tajikistan has a chance to partially replace China and Iran in the world market of nuts and dried fruits


Tajikistan has a chance to partially replace China and Iran in the world market of nuts and dried fruits

03/13/2020

Uncertainty of the situation leads to great caution when exporting, which reduces the volume of trade and negatively affects manufacturers and representatives of the export business

The impact of coronavirus and Russia’s economic problems on the produce business in Tajikistan is already becoming very sensitive. EastFruit expert Bakhtiyor Abdukhuhidov analyzes the pros and cons of the changes that have occurred in the Tajik market in recent weeks.

  • Due to the closure of China and Iran, there were many requests for import substitution, including candied fruits, walnuts, pecans, pumpkin seeds, cornel, etc. European companies began to send more requests for dried fruits, but so far it doesn’t come to real deals .

  • Russian chains are also actively phoning potential suppliers of dried fruits and nuts in Tajikistan, and asking what suppliers will be able to export in the next four months, on what terms and conditions. The Russians need to close the volumes that came from China, Iran and Azerbaijan (re-export from Iran through Azerbaijan has greatly decreased).

  • For Tajik greenhouse vegetable producers, the closure of Afghanistan and Pakistan guarantees that there will be no collapse in tomato prices. Accordingly, they will be able to earn more this season. Of course, this is not so pleasing to consumers. In Tajikistan there are more than 500 hectares of unheated greenhouses in Khatlon, and in a month the active harvesting of tomatoes in these greenhouses will begin.

  • Since the export season for fresh fruits and vegetables is not yet a season, the impact is difficult to assess. Export will begin in the second half of April – onions and the first consignments of stone fruits (apricot and cherry) will go to the Russian Federation. While they say that they are waiting for supplies, however, the devaluation of the Russian ruble in recent days and the prospects for a further depreciation of the Russian currency, make suppliers cautious about deliveries to this country now, especially on terms of deferred payment.

  • In general, buyers within Tajikistan began to buy more groceries, as well as other groups that can be stored for a long time. Consumers actively stockpile rice, flour, pasta, sugar and butter. Also, almost every family bought a bag of potatoes and onions. Accordingly, demand for these goods has risen, and so have prices.

Among the negative points, the following can be noted.

  • In recent years, Tajikistan has been actively using the Poti port in Georgia as an important transport hub for exporting products. Now, after the closure of Iran, this direction was the main one for export to the Middle East: Turkey, the UAE, Saudi Arabia, etc., as well as for sending goods to the USA and even to the Russian Federation. As a result, there is now a huge influx of cargo in this port, and everything is worth it. Last week there was a forty-kilometer line at the border, but already yesterday it was reduced to 10 km. Nevertheless, some Tajik businessmen have been in cars for two weeks with a load of dried fruits for shipment to the United States.

  • Closing supplies from Afghanistan led to a rise in price of potatoes and tangerines in the domestic market of Tajikistan. Usually, many Pakistani early potatoes are imported through Afghanistan, but now there is no import, which directly affects prices.

  • Some of the cargo vehicles were stuck in Iran, including from Tajikistan and Uzbekistan. They are already waiting for permission to leave the border, but this took several weeks and led to losses for suppliers.

  • Goods that were delivered online to Russia for sale in rubles became non-profitable, since the devaluation of the ruble by 10% completely ate the entire margin. Networks do require low purchase prices, and the margin is usually close to 10%. It is still unknown what will happen to the course in a month, so the goods may well be even unprofitable, since the standard deferral of payment is from 30 to 50 days after acceptance of the goods.

  • Uncertainty of the situation leads to great caution when exporting, which reduces trade volumes and negatively affects manufacturers and representatives of the export business;

  • Uncertainty also negatively affects investments in the fruit and vegetable sector. Many projects are frozen or paused.

Accordingly, so far, experts do not expect an improvement in the situation, especially against the background of reports of the discovery of the first cases of coronavirus in Kazakhstan – the largest country in Central Asia and the most important transit hub for Tajik and Uzbek entrepreneurs.

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