AGRICULTURE TRADE
REPORT 1389
Statistics & Marketing Information Dept.
This publication was prepared by USAID’s Agricultural Credit Enhancement Program in collaboration with the Statis-tics & Marketing Information Department of the General Directorate of Policy and Planning of the Ministry of Agriculture, Livestock and Irrigation.
20102011
Participation in international trade is an im-portant factor for increasing in the prosper-ity of developing countries. In many develop-ing countries a defensive approach towards trade, with a focus on the negative effects of imports, rather than a focus on the benefits from opening to world markets, is common. Information on export performance, and potential of many developing countries in-cluding Afghanistan, remains incomplete and is one of the many reasons of market infor-mation gaps with respect to trade facilita-tion and trade development. The agriculture trade reports series aims to contribute to bridging this gap of infor-mation for several agriculture actors that might not have the resources to generate a full market research process. These reports are not intended to act as a detailed export/import market intelligence that successful exporting/importing requires but rather as a basic analysis of exports and imports pros-pects, to provide agriculture actors with the big picture of trade flows.This report focuses on agriculture trade flows of Afghanistan. A broad spectrum with respect to trade dynamics, trade flow directions, agriculture trade geography and a more detailed overview of trade flow char-acteristics at a product level and by partner country, can be found within the next para-graphs.The report offers insight with respect to the importance of agriculture trade to trade in overall, structure of agriculture exports/agriculture imports in overall, structure of exports/imports by trade partner. It also answer questions like: Who are the main trade partners of Afghanistan with respect to agriculture goods? What are we export-ing and to where? What are we Importing and from where?
Agriculture Trade Report1
PREFACE1
According to the OECD-FAO Agriculture Out-look 2010-2011, commodity prices rose sharply in August 2010, because of reduced production and low stocks in key producing countries. Ac-cording to the World Economic Outlook 2011, the overall IMF commodity price index rose by 32% during the second half of 2011. Weather-related supply shocks were important in food markets in the second half of 2010. Specifically, adverse weather conditions during 2010 led to harvestshortfalls in wheat (Russia, Ukraine), rice, rubber, cotton, and local vegetables (south and south-east Asia),corn (United States), and sugar (India). One of the strongest La Niña weather events in 50 years contributed to some of these con-ditions, particularly in Asia. Demand remained robust, partly reflecting a sharp rebound in bio-fuel production. The price responses to supply setbacks were exacerbated by trade restrictions (for example, grain export bans in Russia and grain export quotas in Ukraine in 2010). All of these developments delayed restocking and kept inventories for some important crops very low.High commodity prices are a positive signal to a sector that has been experiencing declining prices for many decades and are likely to serve as a stimulus for increased investments and pro-ductivity, according to the Outlook.
However supply response is usually conditioned by the relative costs of inputs, and incentives provided by higher commodity prices that are not easily passed to producers due to high trans-action costs, domestic policy or exchange appre-ciations. Agriculture production is expected to increase in the short term, assuming normal weather. Accoding to the agriculture Outlook, global production is projected to grow 1.7% annually. Slower growth is expected for most crops like oilseeds and coarse grains that face higher pro-duction costs.Commodity prices should fall from the highs of early 2011 but in real terms are expected to av-erage up to 20% higher for cereals and up to 30% for meats over the 2011-2020 period as compared to the previous decade. According to the WFP, Afghanistan Market price Bulletin, November 2010 issue at a national level, consumer prices increases were observed dur-ing 2010. On inter-annual comparison, the overall CPI increased by 8.5 points; food index compo-nent of the national CPI increased by 6.7 points and the index for non-food items increased by 11.3%.
Agriculture Trade Report 2
AGRICULTURE DEVELOPMENTS
2010
Source: OECD-FAO, World Agriculture Outlook, 2011-2020
2.1 ExportsAgriculture trade flows of Afghanistan reached 71,509 million AFN (1,568 million USD). Trade flows are mainly represented by imports which account for 89% of the total. The trade deficit was valued at 56,380 million AFN (1,236 million USD). Agriculture exports were valued at 7,564 mil-lion AFN (165.8 million USD). Their share of total exports for the country has increased to 68.5%. Exports of carpets and skins account for a smaller share of the total than in previous years, which shows their significance for exports of Af-ghanistan in overall. They have vigorously grown since 2000, having increased around 8.5 times. Despite the positive export developments, the export/import ratio is only 11.8 percent contributing to a negative trade balance of 1,236 million USD (56,380 mil-lion AFN). Which is up to 20% higher for cereals and up to 30% for meats over the 2011-2020 period as compared to the previous decade. Table 1 and figure 3 show the composition of exports by areas. As we can observe from the table and graph, exports are concentrated in a few areas, representing mainly raw agricultural products such as fresh or dried fruits and nuts which account for the largest share of exports equal to 39% of total exports or 2,958 million AFN (65.1 million USD) in value. Lac, Gums and Resins is the next category accounting for 27% of total exports or 2,017.9 Million AFN (44.1 million USD) followed by oils seeds (17%) and vegetables (10%).The monthly dynamics are shown in figure 2. The average export flux per month is 630 mil-lion AFN (13.8 million USD), while the busiest period for exports is September –December during which export values vary between 750 to 900 million AFN.
TRADEFLOWS
OVERVIEW
Agriculture Trade Flows Report3
EXPORTS
2
TRADEFLOWS
OVERVIEW
Agriculture Trade Flows Report4
Table 2 shows exports at a detailed product level. Here we can observe the detailed products that account for the largest values exported. Pine oil vegetable extracts account for the largest share, accounting for 27% of total exports,
followed by dried grapes (13%), potatoes (5%) and other seeds. The top 20 products account for 88% of total agriculture exports, which is another indicator for the large concentration of exports within a few commodities.
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EXPORTS
Agriculture Trade Report5
2.2 ImportsAgriculture imports reached 63,944 million AFN (1,402.6 million USD) during 2010-2011. They ac-counted for 20% of total imports. Figure 4 and table 2 shows their composition by area of the Harmonizes System. Agricultural imports are less concentrated than exports and are represented by more categories. The most important catego-ries in terms of imports are cereals and milling products which account for 20% of total agri-cultural imports. Other significant categories for imports are sugar and products followed by oils, herbs and spices, meat and finally dairy products, other food preparations and tobacco. The monthly import dynamic is shown in figure 5. The average monthly import flux is 5,464 million AFN ( 120 million USD).
Imports transactions also tend to increase during the period September – December, reaching almost 8,000 million AFN in December 2010.
TRADEFLOWS
OVERVIEW
IMPORTS
Agriculture Trade Report6
As Table 3 shows, that the most imported prod-ucts during 2010-2011 account for 77% of total agriculture products. They vary from wheat flour
imports of the value 12,379 million AFS (19%) to vegetable oils (10%), to frozen chicken parts (5%), black tea (5%) and so on.
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TRADEFLOWS
OVERVIEW
IMPORTS
TRADEFLOWS
OVERVIEW
Agriculture Trade Report7
IMPORTS
3.1 Overview
Trade flows of Afghanistan are characterized by the flux with regional countries. As graph 6 shows regional countries account for around 70% of to-tal trade flows. The most important trade part-ners are Pakistan, Kazakhstan, India, Iran but Ma-laysia, UAE and USA also account for considerable shares.Afghanistan accounts for a positive trade balance with some countries including regional countries as shown in table 5. In terms of agriculture prod-ucts, Afghanistan has the highest trade surplus with one of its main trade partners; India valued at around 7 millions USD, followed by Iraq and Turkmenistan as observed in table 5. The highest trade deficit of 353.1 million USD is registered with Pakistan, followed by Kazakhstan, Malaysia, Iran and USA.
TRADEGEOGRAPHY 3
OVERVIEW
Table 5: Most positive and negative trade balances, by partner country, 2010-2011
Agriculture Trade Report8
India is the most important trade partner in terms of exports accounting for 43% of total exports or 3,265 million AFN (71.6 million USD), followed by Pakistan accounting for 15% or 1,150.6 million AFN (25.3 million USD) and Iran 9%, 686.5 million AFN (15 million USD). Exports have found their way to other countries as well, including Russia, United Arab Emirates, Turkmenistan and Iraq who account also for considerable shares, as observed in figure 7. Pakistan is the most important import partner ac-counting for 27% of total imports of agriculture products or 17,250.5 million AFN (378.4 million USD. Another important country is Kazakhstan accounting for 15% of total imports and the im-port value of 9,399 million AFN 205.6 million USD).Other countries significant in terms of imports are shown in figure 8.
3.2 Trade with specific countries
In this section we will go into more details into specifics of trade with the main trade partners of Afghanistan, for agriculture goods. The more de-tailed observations by country are necessary to understand the characteristics of trade for each country. In this section we will give answers to the questions: What agriculture products do we export to these counties? What agriculture prod-ucts do we import from these countries? What are the most exported/imported products to/from each country?
TRADEGEOGRAPHY
TRADE WITH SPECIFIC COUNTRIES
Agriculture Trade Report9
3.2.1 Trade with Pakistan
Trade flows with Pakistan reached 18,401 million AFN (403.7 million USD). The trade deficit was valued at 16,099 million ANF (353.1 million USD) and the export/import coverage measured as a percentage of exports over imports was 6.6 per-cent. Exports of agriculture products to Pakistan reached 1,150 million AFN (25.3 million USD). Fig-ure 7 shows exports division by HS chapters. They account for 15.2% of total agriculture exports. As we can observe in the graph, exports’ composi-tion is mainly raw agriculture products which indi-cates low development of agro-processing indus-try. Fruits and vegetables are the main category of exports accounting for 75% of total exports, followed by herbs and spices and medicinal plants.
Table 6 shows the list of most exported agriculture products to Pakistan. As the ta-ble shows the most exported commodi-ties are fruits and vegetables accounting for 67.4% of total exports. Onions are the main exported item accounting for 3.1 million USD during the year, followed by apricots, seeds of caraway, apples and wa-termelon.
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TRADEGEOGRAPHY
TRADE WITH PAKISTAN
Agriculture Trade Report10
Imports from Pakistan reached the value 17,250.5 million AFN (378.4 million USD). Figure 10 shows the division of imports by HS chapter. As observ-able from the graph, imports of agriculture prod-ucts from Pakistan are less concentrated than ex-ports and account for a larger variety of products. The most imported categories are cereals and products thereof, fruits and vegetables, but also dairy products, oils and food preparations.
Table 7 shows the most imported products from Pakistan to Afghanistan. They account for 70 per-cent of agriculture imports from Pakistan. Milled rice comes in the first place accounting for 22% of total imports, followed by wheat flour account-ing for 15% of total agriculture imports. The other top imported products fall under the above men-tioned imported categories as shown in table.
TRADEGEOGRAPHY
Agriculture Trade Report11
TRADE WITH PAKISTAN
3.2.2 Trade with India
Agriculture trade flows with India were estimated at 6,216.6 million AFN (136.3 million USD) while the trade balance is a surplus, valued at 314.4 Mil-lion AFN or 6.8 million USD. The export/import ration is 110%. All these figures show that Afghani-stan is exporting more than importing from In-dia. In terms of categories of exported goods, the exports of fruits and vegetables and resins, gums and lace, are to be mentioned. They account for 97% of total exports while the rest is herbs and medicinal plants. On a product level the vegetable extracts used in the perfume industry, like the extracts of pine oil account for 60% of total exports as shown in table 8. This is also the main exported product from Afghanistan. Dried fruits and nuts contribute to almost 40% of exports; pistachios with 7,3 mil-lion USD, raisins with 5,3 million USD, dried figs with 5,2 million USD as well as hazelnuts, dried apricots and almonds. The most exported items to India account for 97% of total exports which proves again the strong concen The most export-
which proves again the strong concentration of exports in a few items and categories.
TRADEGEOGRAPHY
TRADE WITH INDIA
Agriculture Trade Report12
Agriculture imports from India reached 2,951 mil-lion AFN, (64.7 million USD). They account for 5% of total agriculture imports. Tobacco is one of the main categories of import from India, accounting for 46% of total imports. Dairy products are an-other important category accounting for 21% fol-lowed by food preparations accounting for 19%. Afghanistan is exporting mainly agriculture prod-ucts in their raw form and with no value addition and is importing agro-processed products which account for 40% of total imports from India. Table 9 shows the most imported products. They ac-count for 93% of total agriculture imports that flow in from this country, signaling a strong con-centration of imports only in these items. Tobacco is the most imported item accounting for 28.9 million USD, followed by cane sugar, 11.8 million USD. The other products fall in the diary products or cereals, or spices. For more detail please refer to table 9.
TRADEGEOGRAPHY
Agriculture Trade Report13
TRADE WITH INDIA
3.2.3 Trade with Kazakhstan
Trade Flows with Kazakhstan reached 9,471 mil-lion AFA, (207.3 million USD). The trade deficit with Kazakhstan is the second largest at the value -204 Million USD. Exports were valued at 72.5 million AFN (1.59 million USD) accounting for less than 1 percent of total exports. On the other hand imports flowing from Kazakhstan have been far more aggressive being valued at 9,399 million AFN (205.6 million USD), accounting for 15% of total agriculture imports to the country. These de-velopments keep the export/import ratio at 0.8%, which is the lowest among important trade part-ners, despite the regional vicinity and the export potential.The most exported products are listed in table 10. They account for 100 % of agriculture exports because this is all we export to this neighbor country. The main item, cigarettes, account for 66% of total exports. Other items are potatoes, raisins and oranges in low quantities and values.
TRADEGEOGRAPHY
TRADE WITH KAZAKHSTAN
Agriculture Trade Report14
3.2.4 Trade with Iran
Trade flows with Iran were valued at 5,068 mil-lion AFN (111.2 million USD). The trade balance is a deficit valued at 81.5 million USD. The export import ratio is 16%. Agriculture products exports reached the 686.5 million AFN (15.0 Million USD). They account for 9% of total exports of agricul-ture products. On a category perspective they are mainly rep-resented by two categories seed and fruits and vegetables accounting for 86% and 10% of exports to Iran, respectively. On a more detailed perspec-tive, seeds used for the production of cooking oil were the most exported items, followed by differ-ent types of dried fruits as observable in table 11. Most exported items to Iran account for 94% of total exports.
TRADEGEOGRAPHY
TRADE WITH IRAN
Agriculture Trade Report15
Imports from Iran reached 4,381 million AFN (96.2 million USD). They contribute for 7% of to-tal agriculture imports. A large variety of agricul-ture products are imported from Iran, the main category being the agro-processed food. Other categories are oils, cereals, sugars, spices etc. as observed in figure 15.On a more detailed level, some of the most im-ported agriculture products are biscuits, oils, sug-ars, wheat, pasta, tomato juice, representing all prepared foods of different kinds. The most im-ported agriculture products account for 72% of total imports. For more details refer to table 12.
TRADEGEOGRAPHY
Agriculture Trade Report16
TRADE WITH IRAN
3.2.5 Trade with USA
USA accounts for 5% of trade flows of Afghani-stan. Trade flows were valued at 3,688 million AFN (80.9 million USD). The trade deficit was valued at 76.9 million USD while the export/import ratio was 2.5%. Agriculture exports to USA reached 90.8 million AFN (1.9 million USD). They accounted for 1.2% of total agriculture exports. They are represented by three categories, medicinal plants accounting for 76% of total exports, fruits accounting for 20% and herbs accounting for 4%.The most exported products account for 98% of total exports. The most exported item, liquorice roots known as an herbal remedies accounts for 74.4% of total exports. Other exported items are dried grapes, saffron, dried apricots etc. as observ-able in table 13.
TRADEGEOGRAPHY
TRADE WITH USA
Agriculture Trade Report17
Imports from US were valued at 3,597 million AFN. They account for almost 6 percent of total imports and are mainly represented from meat and dairy products. The most imported products also under these categories, account for 94% of total imports. For more details refer to table 14.
TRADEGEOGRAPHY
Agriculture Trade Report18
TRADE WITH USA
AGRICULTURE TRADE FLOWS
REPORTAGRICULTURE TRADE REPORT
1389
Statistics & Marketing Information Dept.
20102011
