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Dried Fruits and Nuts Sector Ministry of Industry and Commerce Islamic Republic of Afghanistan AFGHANISTAN’S NATIONAL EXPORT STRATEGY 2018-2022 AFGHANISTAN • • AFGHANISTAN DRIED FRUITS NATIONAL EXPORT STRATEGY - DRIED FRUITS AND NUTS SECTOR • 2018-2022 AND NUTS SECTOR A taste of Afghanistan shared around the world ITC is the joint agency of the World Trade Organization and the United Nations. As part of ITC’s mandate of fostering sustainable development through increased trade opportunities, the Chief Economist and Export Strategy section offers a suite of trade-related strategy solu- tions to maximize the development pay-offs from trade. ITC-facilitated trade development strategies and roadmaps are oriented to the trade objectives of a country or region and can be tailored to high-level economic goals, specific development targets or particular sectors, allowing policymakers to choose their preferred level of engagement. The views expressed herein do not reflect the official opinion of ITC. Mention of firms, prod- ucts and product brands does not imply the endorsement of ITC. This document has not been formally edited by ITC. © International Trade Centre 2018 ITC encourages reprints and translations for wider dissemination. Short extracts may be freely reproduced, with due acknowledgement, using the suggestion citation. For more extensive reprints or translations, please contact ITC, using the online permission request form: http: / / www.intracen.org / Reproduction-Permission-Request / The International Trade Centre ( ITC ) Street address : ITC, 54-56, rue de Montbrillant, 1202 Geneva, Switzerland Postal address : ITC Palais des Nations 1211 Geneva, Switzerland Telephone : + 41- 22 730 0111 Postal address : ITC, Palais des Nations, 1211 Geneva, Switzerland Email : [email protected] Internet : http : / / www.intracen.org Layout: Jesús Alés – www.sputnix.es AFGHANISTAN NATIONAL EXPORT STRATEGY 2018-2022 DRIED FRUITS AND NUTS SECTOR Ministry of Industry and Commerce Islamic Republic of Afghanistan This project is funded by the European Union iii ACKNOWLEDGEMENTS The Dried Fruits and Nuts Strategy forms an integral part of Afghanistan’s National Export Strategy ( NES ). It was developed under the aegis of the Islamic Republic of Afghanistan and the leadership of the Ministry of Industry and Commerce ( MoIC ) and the Afghanistan Chamber of Commerce and Industry ( ACCI ), in close collabora- tion with the Ministry of Agriculture, Irrigation and Livestock ( MAIL ), the Afghanistan National Standards Authority ( ANSA ) and the Afghanistan Women Chamber of Commerce and Industry. The Strategy benefited from the contributions of sector stakeholders and associations, who played an important role in the consultative process. This Strategy was elaborated thanks to the technical assistance of the International Trade Centre ( ITC ) and falls under the framework of the European Union ( EU )-funded ‘Advancing Afghan Trade: EU Trade Related Assistance’ project. This document reflects the ambitions of the public and private stakeholders who defined the enhancements and future orientations for the sector with a view to in- creasing export performance and social dividends. iv NOTE TO THE READER Afghanistan’s NES was developed based on a participatory approach during which over 500 Afghan industry leaders, small business owners, farmers and public sector representatives held consultations to reach consensus on key sector com- petitiveness issues and priority activities. These inclusive consultations were held throughout the country, including in Mazar-e-Sharif, Herat, Kandahar and Kabul, with participation of stakeholders coming from Nangarhar Province. Besides in-depth research and value chain analysis, these consultations were com- plemented by: Factory visits through which supply chain assessments were carried out to gain further knowledge on key issues such as quality procedures, technical skills, lean management, quality of raw materials, access to market, etc. Interviews with domestic, regional and international buyers to guide the NES with strategic insights and market intelligence as well as buyers’ requirements in terms of quality standards, food safety, packaging, buying cycles, distribution channels, prices, etc. Donor coordination meetings to identify synergies with ongoing / planned ini- tiatives of development partners to eventually result in collaboration during the implementation phase. In spirit and in action: The NES is aligned with existing national and sector-specific plans and policies and builds on ongoing initiatives in areas related to private sector development, regional integration, investment, and youth and women’s economic empowerment. Equally important, the NES initiative already accommodates budgeting to support implementation of critical pilot activities identified during the design process. This will ensure that impact and momentum are generated from early on, and support further resource mobilization and confidence-building. v The principal outputs of the NES Afghanistan design initiative are endorsed, coherent and comprehensive export Strategy documents with a five-year detailed plan of ac- tion ( PoA ) and implementation management framework. These documents include: 1. A main NES document, which contains Trade Support Functional strategies, offering critical support across value chains and acting as enablers for sector development. 2. Individual NES priority sector strategies packaged as separate documents but in alignment with the main NES findings and overarching strategic objectives. NES Afghanistan Main NES document comprising Trade Support Functional Strategies: Quality management Trade facilitation Trade information and promotion Skills development Business and professional services Access to finance Individual NES priority sector documents: Saffron Fresh fruits and vegetables Dried fruits and nuts Carpets Marble and granite Precious stones and jewellery vi CONTENTS Acknowledgements iii Note to the reader iv EXECUTIVE SUMMARY 1 Strategic objective 1 : Increase volumes of production through better sector coordination, intensification of market-driven production and reduced spoilage. 1 Strategic objective 2 : Enhance food safety and quality assurance by fostering the adoption of enhanced processing methods. 2 Strategic objective 3 : Reclaim Afghanistan’s prominent global reputation through improved packaging and sound market insertion strategies. 2 TRAJECTORY OF THE GLOBAL SUPPLY CHAIN AND ENTRY POINTS FOR AFGHAN EXPORTERS 5 PRODUCT MAP 5 SWEET OUTLOOK FOR THE SECTOR AS GLOBAL DEMAND CONTINUES TO GROW 6 A MIXED BAG OF PLAYERS AND STRATEGIES 8 GROWTH OF EUROPE AND ASIA AS IMPORTING REGIONS 8 LEADING IMPORTERS BY PRODUCT 9 A FEW COUNTRIES DOMINATE GLOBAL SUPPLY FOR MOST PRODUCT TYPES 13 LEADING EXPORTERS BY PRODUCTS 14 MAIN DRIED FRUITS AND NUTS SUPPLIERS AND STRATEGIES 16 United States 16 Turkey 17 Islamic Republic of Iran 17 Germany 18 Spain 18 AFGHANISTAN’S DRIED FRUITS AND NUTS VALUE CHAIN 19 CURRENT VALUE CHAIN OPERATIONS 19 Production of dried fruits and nuts 19 Dried fruit and nut processing 19 Value addition facilities 20 Distribution 20 vii Domestic market 20 International market 20 Fragmented production ecosystem leads to opportunistic rather than demand-driven sector production 22 Low levels of technology characterize Afghan dried fruit and nut processing 22 Unmet financial needs across the value chain 23 Packaging and branding remain major sector weaknesses 23 AFGHANISTAN’S CURRENT EXPORT PERFORMANCE 24 SOME TOUGH NUTS TO CRACK : A SERIES OF CHALLENGES PREVENTING SECTOR GROWTH 29 IN A NUTSHELL : POSITIONING THE AFGHAN DRIED FRUITS AND NUTS SECTOR IN THE GLOBAL MARKET 39 MARKET IDENTIFICATION 42 Short-term phase 42 Medium-to-long-term phase 47 ACHIEVING THE GOALS : VISION AND STRATEGIC OBJECTIVES 51 VISION 51 Strategic objective 1 : Increase volumes of production through better sector coordination, intensification of market-driven production and reduced spoilage. 51 Strategic objective 2 : Enhance food safety and quality assurance across the value chain by fostering the adoption of enhanced processing methods. 53 Strategic objective 3 : Reclaim Afghanistan’s prominent global reputation through improved packaging and sound market insertion strategies. 55 MOVING TO ACTION 57 KEY REQUIREMENTS FOR EFFECTIVE IMPLEMENTATION 57 Establish and operationalize a public and private coordinating body and executive secretariat 57 PLAN OF ACTION 59 viii FIGURES Figure 1 : Theory of change 3 Figure 2 : Product map - Dried fruits and nuts 5 Figure 3 : World exported value of dried fruits and nuts, 2005–2016 ( US $ thousands ) 13 Figure 4 : Current value chain – dried fruits and nuts 21 Figure 5 : Afghan exports of dried fruits and nuts, 2008–2016 ( US $ thousands ) 24 Figure 6 : Afghan export basket, dried fruits and nuts, 2008 25 Figure 7 : Afghan export basket, dried fruits and nuts, 2016 25 Figure 8 : Afghanistan’s top 10 export destinations 2008 ( US $ thousands ) 26 Figure 9 : Afghanistan’s top 10 export destinations 2016 ( US $ thousands ) 26 Figure 10 : Problem tree : challenges to compete 32 Figure 11 : Problem tree – challenges to connect 35 Figure 12 : Problem tree – challenges to change 38 Figure 13 : Market segments according to price ranges 40 Figure 14 : Export potential to India – figs 44 Figure 15 : Export potential to India – dried grapes 44 Figure 16 : Export potential to India – dried apricots 44 Figure 17 : Export potential to India – fresh or dried nuts 44 Figure 18 : Export potential to the UAE –
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