LAHORE: In today’s global marketplace, buyers purchase a wide array of commodities from different parts of the world.
The global buyers, however, face various challenges while buying commodities across geographical boundaries.
Traditionally, they go through a long and cumbersome process of procuring such commodities that includes but not limited to; quality assurance of the commodities as per international standards, issuance of Letter of Credits for sellers, procurement challenges such as ground logistics, sea cargo, procurement of insurances and overcoming local custom hurdles prior to getting the commodities delivered at their desired ports.
In Pakistan, farmers and commodity stockists produce and export a rich variety of agricultural and non-agricultural commodities globally. It is often very challenging for them to find international buyers or satisfy their demands due to various by-laws and operational challenges. As a result, they tend to lose their market share against competing countries.
The Chief Executive Officer of Enrichers Investment Group, Syed Abdullah Bukhari said that educating farmers and stockists is the only way for the country to boost up the agriculture produce as well as selling the excess produce in global markets by using latest trading tools.
“Export is not about ‘one size fits all’, a successful reorientation towards our trade policies keeping in view the accreditation protocols of export destinations and understanding legalities of each market is crucial”, Bukhari he said.
In an interview with Express Tribune, Bukhari said that our Asian counterparts are accelerating on account of their level of integration with regional and global markets. The rationale of Pakistan’s unimpressive growth is our enormous dependence on international business intermediaries, low margins, vulnerable fluctuation in prices and terms of trade, energy shortages, adverse trade policies, tariff and non-tariff barriers, and paper-pusher custom procedures to name a few.
“With respect to exports, relatively poor productivity growth rate is an obstacle to much-needed inflows. To keep pace with global food demand; there has to be a shift from domestic demand-generated growth to export-oriented growth and for that we need to have precise geographically explicit knowledge about gap analysis with local-to-global relevance aligned with grading and sorting potential methods of market segmentation”.
Our policy makers, development professionals, and entrepreneurs can cultivate avenues of growth by promoting our produce to create demand and find the best match to manage the demand-supply bottleneck, he said.
In addition to this, particularly educating farmer at a great degree can improve productivity outcome that can create holistic impact on export-oriented growth. “Having said that, we need to create capabilities of growth by linking research to strategies to comply with Pakistan’s economic growth potential”, he said.
Bukhari believes that among the two wings of our commodity trading i.e. Cash Settled Futures and Deliverable Futures, the latter can play a critical role in adding a decent plaster to our fractured economy.
Albeit, Deliverable Futures come with unique set of complexities; however recent initiative by Pakistan Mercantile Exchange, under the name of Global Commodity Trading Platform (GCTP) has open gateway of opportunities by giving transparency and efficiency to these intricate factors.
“One-window solution to sell commodities electronically to overseas buyers can break the shackle of vicious cycle of farmer who is subject to manipulation, and may turn out to be a milestone to drive our economy”, he said.
Furthermore, armed with an understanding of supply and demand shift, regular standards closely aligned with commercial practices, risk management, effective quality assurance, and well-developed support infrastructure certainly will transform and increase involvement of large number of market players including farmers, Bukhari added.
However, there are some grey areas that need to be addressed most intrinsically that can strengthen both social justice and economic growth i.e. by creating awareness in farming community.
“Unfortunately, there is no system at large that serves for education and awareness amongst farmers, at the same time, system at large subsists at creating market monopoly for farmers”.
Education does not only enhance the farming skills and productive capabilities of farmers but it also empowers them to make decision right for all the stakeholders. “Our farmers work in double-edged sword conditions – decision-making process, implanting long term goals, and marketing and finance-related practices would eliminate farm hazards and will enable farmers to leverage well-proportioned pesticides, balanced fertilizers, and quick-witted land preparation skills”, he said.
Agriculture education combines applied science and business management that highlights how agriculture can emphatically contribute to economic and social infrastructure. “Therefore, in order to create a strong threshold effect and get the ball rolling, wider dissemination of basic awareness programs for farmers must be conducted to boost agriculture productivity”, he added.
Hence, agriculture being the main driver of socio-economic development can boost strong agriculture economy that may bring social progress and economic transformation in local as well as in agri export markets, Bukhari added.
