Maximizing the Potential of Central Asia’s Horticulture Exports to the PRC

The PRC imported $2.5 billion worth of grapes, plums, apricots, and cherries in 2020. The Kyrgyz Republic, Tajikistan, and Uzbekistan have significant competitive advantage in these fruits, but they lack access to the PRC's horticulture market. These three CAREC member states combined have only a 0.01% share in Chinese imports of these fruits. They export 90% of their fruits and vegetables to only a handful of countries.

This study used an extended gravity model framework to analyze the export potential of the Kyrgyz Republic, Pakistan, Tajikistan, and Uzbekistan to the PRC. In addition to standard gravity variables, it employed a remoteness variable for exporters and importers, which enabled a forecast of the true export potential of a country. Further, the untapped potential exports are calculated by estimating the difference between actual and fitted values of exports.

The horticulture commodities for this study were selected based on their share in the PRC’s total exports and available data. The export data for Kyrgyz Republic, Tajikistan, and Uzbekistan were taken from 2000 to 2019, as no bilateral export data exists for these countries prior to 2000.

The study estimated the Kyrgyz Republic’s potential exports of grapes, walnuts, almonds, and apricots to the PRC at $2.4 million in 2019. The results suggest that while the country has been able to reach its potential export level in grapes and almonds, it still lagged in walnuts and apricots.

Figure 1: Kyrgyz Republic's Potential Exports to the PRC—Almonds (Fresh)^[2]

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Figure 2: Kyrgyz Republic's Potential Exports to the PRC—Grapes (Dried)

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Pakistan had the potential to export $53,000 worth of mangoes and citrus fruits to the PRC in 2019, although inconsistency in exports remained high. The results suggest that actual export sales went above the potential level in a few years but remained very low on average.

Figure 3: Pakistan's Potential Exports to the PRC—Citrus

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Tajikistan's estimated potential apricot and cherry exports to PRC was $700,000. While the country reached its potential level for cherries in 2019, it lagged significantly behind its potential level for apricots, as its average annual apricot exports to the PRC reached only 5% of potential exports.

Figure 4: Tajikistan's Potential Exports to the PRC—Apricots (Dried)

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Figure 5: Tajikistan's Potential Exports to PRC—Cherries (Fresh)

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Uzbekistan’s potential exports of apricot, grape, and walnut to the PRC were estimated at $26 million. Results show grape exports performed well and can increase in the future if the pace is sustained. However, walnut and apricot exports remained low.

Figure 6: Uzbekistan's Potential Exports to PRC—Walnuts (Shelled)

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Horticulture commodities with a large gap between actual and potential exports in this study have the highest potential to boost exports. Government support can help improve domestic production and increase exports, providing multiple benefits, such as job creation, higher income, reduced income inequalities, and improved trade balance.

The following measures can help boost CAREC’s horticulture exports to the PRC by creating an enabling environment:

• Integrate small-scale farmers into the value chain to ensure consistent supply. Governments can promote cooperation between farmers and impress on them the benefits of knowledge-sharing and integration into the value chain through workshops and training activities.

• Equip farmers in CAREC countries with modern techniques and knowledge about fruit production and handling. Governments should invest in disseminating best practices to farmers and distributors. Their extension departments can initiate educational programs for small-scale farmers on cultivating high-yield varieties, plant care, post-harvest handling of fruits, and the importance of fruit calibration.

• Invest in a sustainable and efficient cold chain storage system to ensure a consistent supply and large volume of fruits, particularly for the Kyrgyz Republic, Pakistan, and Tajikistan.

• Find and serve niche markets for agriculture products around the world. These include markets for walnuts from the Jalal-Abad region of the Kyrgyz Republic, apricots and cherries from Tajikistan, and grapes from Uzbekistan's Samarkand and Fergana valleys that have unique taste and organic and area-specific cultivation.

• Improve branding and marketing initiatives, as Chinese buyers are unaware of the taste, quality, and nutritional value of Central Asian fruits. It is important to market the fruit based on product differentiation. Governments in the CAREC countries need to prepare the private sector to help small farms by conducting regional studies to identify possible farm-based or regional agricultural brands and establish the steps to develop these brands.

• Fast-track sanitary, phytosanitary, and quality protocols with partners, especially the PRC. Keep physical visits to a minimum and use technology for inspection. A few private laboratories can also be authorized to issue certifications under stringent rules and regulations. This would help bring onboard a larger number of orchards and thus ensure large volumes of fruits for export.

• Invest in seedless varieties of grapes and citrus fruits if Pakistan and Uzbekistan wish to capture the Chinese market. Farmers should be informed about the low prospects for seeded varieties because of changing consumer tastes. Research and development for producing seedless varieties should be prioritized.

Note: ADB placed on hold its assistance in Afghanistan effective 15 August 2021.

^[1] CAREC is composed of Afghanistan, Azerbaijan, People’s Republic of China, Georgia, Kazakhstan, Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan.

^[2] All infographics on exports are based on the author’s estimations.

T. A. Qureshi. 2022. Research Report: Identifying the Potential of Horticulture Exports to the People’s Republic of China from Pakistan, Tajikistan, Kyrgyz Republic, and Uzbekistan. Central Asia Regional Economic Cooperation Institute.