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Af-Pak 2013: Fruitful, nutty business

H Masoodzai, Z Khoshnood and A Zia
Figs against constipation, almonds to cure kidney disease, tons of raisin contraband and deadly pine nut clashes: welcome to the Durand Line dried fruit and nut industry.
12.12.2013  |  Gardez/Khost/Peshawar
Amir Khan, president of the All Dry Fruit Association of Khyber Pakhtunkhwa at his store in Peshawar. (Photo: A Zia. Main photo: Masoodzai)
Amir Khan, president of the All Dry Fruit Association of Khyber Pakhtunkhwa at his store in Peshawar. (Photo: A Zia. Main photo: Masoodzai)

Amir Mohammad Khan sits in his wholesale store in the Namak Mandi area of Peshawar surrounded by three dealers on phones. As Khan, the president of the All Dry Fruit Association in Khyber Pakhtunkhwa prepares his order, the three Afghan fruit sellers work the deal with a buyer in Punjabi.

Finally they turn to Khan. “My brother, please listen to me, prices have gone up due to the high taxes we pay at the Torkham border crossing,” one explains. “That’s why we cannot give you the old price on almonds.”

Whether it is figs against constipation, almonds to cure rare kidney diseases or apricots for nutrition, dried fruit and nuts are in no short supply in Afghanistan, even if most are exported to Pakistan and beyond.

Multi-million dollar business

While the talk is usually about Afghanistan's illegal drug production or mineral wealth, dried fruit and nuts are top exports and a significant addition to GDP.

Afghanistan sent 200 million US dollars worth of dried fruits - a term widely used to include types of nuts too - around the world in 2013 alone, according to Khan Jan Alkozay, chairman of the Afghanistan Chamber of Commerce and Industries (ACCI).

Raisin, walnut, pistachio, almond and pine nuts are leading commodities. But reflecting broader challenges to the country's trade and industry, poor packaging and lack of modern methods and equipment continue to disadvantage Afghan traders.

“We don't have proper places for processing; nor do we have enough money to purchase new and modern equipment and machinery," says Haji Noor Mohammed, who owns a dried fruit business in Kabul with annual turnover over one million dollars.

The ACCI's Alkozay acknowledges that a lack of investment in storage and processing spaces has prevented the sector from growing: "One of the problems we face when we export our fruits to other countries is that we cannot package according to world standards," he told Afghanistan Today.

Land of nuts: Paktia Province in eastern Afghanistan exports million of dollars of fruits and nuts every year across the border to Pakistan. (Photo: H Masoodzai)

And where Afghan traders and farmers have been unable to build niche brands on the world market, Pakistani traders have stepped in.   

There are around 100 wholesale fruit dealers operating near the border crossings of Torkham and Chaman, according to the vice president of the Khyber Pakhtunkhwa Chamber of Commerce, Faiz Muhammad Khan.

“These dealers supply dry fruit to the various cities of Pakistan, like Lahore, Islamabad, Sialkot, Multan, Rawalpindi and other areas,” says Khan, who was unable to put a precise figure on the annual amount imported. “It is a very huge trade,” he emphasized.

Afghan dealers, keen not to let all the profits slip across the border, often smuggle Afghan fruit and nut products into Pakistan to then repackage them as Pakistani products for export again to Turkey, China, Malaysia and other world markets.

Strong brands in smugglers' hands

Smugglers of Afghan dried fruits complain about lack of equipment and facilities inside Afghanistan, and they say if this is rectified they will not smuggle dried fruits anymore.

“The Afghan government has not been able to market Afghan dried fruits in regional and international markets. Therefore, we have to smuggle dried fruits to foreign countries and international markets under non-Afghan brands,” says a smuggler of walnuts and pine nuts in Paktia Province.

Blackmarket fruit is sweetest

“There is a constant demand for the same fruits with much higher prices in Pakistani markets,” says the smuggler, who on condition of anonimity explained that taking a container of nuts across the border can see profits go through the roof.

Ahmad, who legally exports pine nuts from Khost and Paktia, confirms that most of the profits are made by Pakistani resellers.

“We transport the dry fruit to the open market in Pakistan, and sell it to Pakistani dealers, and then the Pakistani dealers send the fruit to Chinese and other foreign markets, and they sell our products under Pakistan’s name,” says Ahmad. He says the solution is for the Afghan government to invest in building local brands.

Experts in the field agree that Afghan brands need to be strengthened if Pakistan’s dominance on the fruit and nut business is to be challenged. 

"The Afghan government should help Afghan farmers to market their product inside Afghanistan,” says Noor Ahmad Elahm, a Kabul-based economist. “The government should also build packaging facilities that would meet world standards; taking these steps would help in preventing and reducing fruit smuggling into other countries, and it will also generate revenue for the Afghan government."

But a key requirement is still to build a functioning taxation system, and there are still too few signs of that happening.

Hard tax nut to crack

Children in Paktia harvest nuts. For many in the area, the nut harvest is their sole form of income. (Photo: Haqmal Masoodzai)

Currently, most ‘taxes’ are informally paid by wholesale dealers and smugglers in the form of bribes to border police, which in turn fuels the contraband trade further.

“Unknown routes are often used to avoid deduction of taxes which the income tax officials charge at border posts upon entry into the country,” says Alkozay from ACCI.

Yet despite the wealth generated in lucrative sales to foreign buyers, local communities who harvest the fruits and nuts continue to live in poverty.

“Mothers sit here to raise children for other countries,” says Hajji Rashim, a land owner in Paktia, who collected more than two tons of pine nuts every year for a quarter of a century. But Rashim, contrary to economist Elham’s argument, says the produce simply does not sell on the local market: “We don’t have the kind of money to buy this expensive fruit in our homes.”

Nazer Khan, who works in the walnut trade in Khost, says local residents nevertheless remain bound to the nut. “People in our areas do not have any other jobs,” says Khan. “Dry fruit product is what we have to support our families.”

Remedies in a nutshell

Pine nuts were used traditionally along the Afghanistan-Pakistan border to cure kidney disease. These days modern medicines are preferred. (Photo: Zarwali Khoshnood)

In the past, certain nuts and fruits served a medical purpose and so boosted local demand. But remedies containing walnut and palm oil have been largely sidelined now that pharmacies stock modern internationally produced medicines.

"We used to heat the pine nuts on a fire to extract the oil which we call zrrana. Zrrana was used for hair and skin treatment," says Saida Jan Sadaat, who owns a herbal medicine store in Paktia's capital Gardez.

“Walnuts were used to treat kidney diseases too, but due to medical advances, they no longer are,” says the herbalist.

In Pakistan, Afghan dry fruits are still in high demand for herbal concoctions, says Hakeem Molvi Subhan Ali, who owns a herbal clinic in Peshawar, adding that. “Figs have been mentioned in the Holy Quran as prevention and medicine for constipation.” 

Due to the high concentration of potassium, the fig is beneficial to patients with hypertension and it is very effective for diabetics, said Ali, whose products sell in districts throughout Khyber Pakhtunkhwa.

As winter sets in though, residents from Dir to Chitral will have to pay more. The price per kilo of peanuts and almonds has already risen 30 per cent this season, according to All Dry Fruit Association President Amir Khan.

Bloodshed harvest

Cause of death: the pine nut business in Khost has seen fatal clashes between stakeholders. (Photo: Zarwali Khoshnood)

Despite the price hike offering new opportunities to Afghan growers and smugglers, the nuts and bolts of the harvest could yet cause a few disputes.  At least in Khost, where pine nuts are more like ‘blood nuts’ because of the tensions and even violence they now cause.

“Before we did not know the importance and value of this tree, and in the past we would immediately cut a pine nut tree when we needed money,” says Hamidullah Zadran, 50, a pine nut dealer from Khost.

“This was when armed conflict erupted between people cutting the trees and people not allowing the cutting, and in some cases the conflicts resulted in deaths,” says Zadran, recalling an incident near Satoo Kandow District when eight people were killed over a pine nut tree.

 

Nuts and bolts of a kernel's journey

The source: huge quantities of pine nuts are collected in the mountains of Khost and Paktia. (Photo: Zarwali Khoshnood)

For centuries many families survived from nut harvests in eastern Afghanistan and Pakistan. (Photo: Haqmal Masoodzai)

Children often work long shifts during harvests at the expense of their schooling. (Photo: Haqmal Masoodzai)

Once sorted, the nuts are transported to other regions to be sold in different markets. (Photo: Zarwali Khoshnood)

Bingo! The pine nuts are usually transported by buyers across the border to Pakistan, where they are often packaged, branded and sold on world markets from Turkey to Malaysia. Pictured are merchants negotiating a sale at the market in Khost City. (Photo: Zarwali Khoshnood)