Korai Traders

INTRODUCTION:
The global dried food industry is involved in the manufacture of food products such as
spices, processed fruit and vegetables, nuts, dried fruit, honey, processed fishery products,
and other foodstuffs.

Dried food manufacturers preserve food through dehydration, which involves the removal of
moisture from a material to prevent the growth of micro-organisms that destroy foods.

The global edible nuts market is expected to break the 13 million ton mark by 2015, reports
Global Industry Analysts. Market growth is fuelled by changing eating habits as consumers
become increasingly health conscious. Companies are marketing dried fruits and nuts as
snack foods, trying to appeal to healthy eaters as an alternative to confectionary and bakery
products.

Producers of dried vegetables are using new techniques yielding better colour and flavour.
Certain dehydrated vegetables are used to make snacks, fast food, soups and instant vegetable
noodles like green chili, cucumber, carrot, cabbage and bitter gourd. Other vegetables have
different applications within the food industry like dehydrated onion, which is used to
manufacture masala bread, buns, pickles, tomato ketchups, pickles, sauces, meat sausages
and breakfast foods. Dehydrated garlic is also popular for its versatility, used in certain
medicinal formulations, boasting antiseptic properties, and it is also used as a digestion aid
for its food absorption qualities.

Dried Fruits of Pakistan


Pakistan is blessed with a diversity of climatic and soil conditions in its several regions
extreme cold to extreme hot, mountainous and hilly to riverine and desert plains. This enables
the country to grow an amazingly large variety of trees, plants, shrubs and vines that bear
fruits of many kinds. Included among the fruits are also those we call dry fruits. The
description covers some fruits which are dried from of soft pulpy fruits. Raisins, for example,
are categorized are dried fruits, being dried grapes. Some varieties of dates are dried into
what is called chhuhara or khurma. Then, there are other dry fruits which are derived from
fruit stones, seeds or nuts, with hard shell around edible kernel, such as walnuts, pine nuts,
apricot nuts, almonds and pistachios.

The kernel from seeds and nuts as well as raisin and dried dates have been known in our part
of the world as delicacy, as components rich and delicious food, as nutrients and also as
ingredients of indigenous medicine having health giving properties. The dry fruits are
yielded by trees and plants that are indigenous to the region where Pakistan is located. They
are believed to have been transplanted in other parts of the world but grow largely in Pakistan
in different areas. Dry fruits have figured in International trade for a very long time. Pakistan
continues to export dry fruits in sizeable quantities. For exports, they are carefully selected,
graded, processed and packaged to meet the requirement of customers in several countries
and in accordance to international standards.





PROFILE

Among the dry fruits, the one which is consumed in its various forms is apricot. It is used as a
pulpy when fresh. When dried, it is tasty to eat and is used in making sweet dishes. The seed
or stone of apricot yields kernel which is like the kernel of almond but distinguishable. Since
the seeds are discarded after the pulp is consumed, apricot kernel is not available in a large
quantity. The most widely used among the dried fruits are dried dates. They are used in
cookies, in sweet dishes and for making halwa, a sweet confection prepared and used in most
of the Muslim countries in western, central and south Asia. Dried dates are also traditionally
distributed among guests on the occasion of religious ceremony in
Muslim weddings. The kernel of pine nuts is available in large quantities in Pakistan but the
better liked dry fruits are almond, walnut, pistachio and raisin. Currant and dried plum
are also available. Almonds, walnuts and pistachios are available in shell form, with kernel
inside or in kernel form. Pistachios in shell are also salted to produce a special flavor.
In many homes in Pakistan, especially during the cold weather, almonds, walnuts, pistachios
and raisins are used as attractive accompaniment to evening tea. Such use of these dry fruits
has spread to western countries as well. They are also used as ingredient in a variety of
dishes. Thinly sliced pieces of almonds and pistachios are also spread over several dishes as
an attractive dressing. Almond and oil extracted from the kernel are used medicinally as well.

PERFORMANCE
Dry fruits have been a significant item of Pakistans export trade, which is channeled through
the countrys port city, Karachi. The metropolis has organized market for the dry fruits which
arrive here from the producing areas mostly in the north. Almonds, walnuts, pistachios,
raisins and currants come from Baluchistan as well.
Major centers for collection and distribution of dry fruits are located in the North West
Frontier Province at Peshawar and in Baluchistan at Quetta. In terms of quantity, major items
of export are dry dates, pine nuts and raisins. But the export of almonds, walnuts and
pistachios has also been making good progress. These dry fruits were also exportable by
Afghanistan but because of the situation obtaining in that country their availability
remains uncertain, while exports from Pakistan continue.

DATES
Date is a fruit of hot and dry region. It is produced in abundance in the desert plains of
Pakistan, mostly in Sind, Baluchistan and Punjab It is a delicious and nutritious fruit. Its
Flesh, edible part contains 58 percent sugar and 2 percent each of protein, fat and minerals.
Date trees are indigenous to Pakistan and are grown in villages around homes, fields and
Pathways. In recent years, as the demand increased within the country and for exports,
Modern date farms have also been set up. Simultaneously, local and multinational
Companies have established well equipped factories for processing and packaging dates.
Dates from Pakistan are exported in sizable
Quantities, in bulk as well as in packets. Among the countries which import Pakistani
Dates is Saudi Arabia, itself a date growing country, which requires large quantities of
Dates during Hajj, the annual congregation of world Muslims at Makah. Among the
Importing countries are also several European and South-Asian countries.

The date tree, in addition to its fruits also yields sap which is used to make gur and
Also as a beverage. Its leaf stalks are utilized for making wickerwork and leaves are woven
into mats.




Vision
Our vision is of an industry that is market driven, profitable, internationally competitive,
and in accord with the needs of the growing, processing and marketing sectors of our
industry.


Mission Statement

Our mission is to: develop and protect Pakistani dried Fruit industrys short and
long term position in world markets in order to maximise returns to growers; and support
growers and processors to efficiently produce the worlds best quality dries fruit to
supply the quality conscious markets; and manage grower funds in an effective and
properly accountable manner.











objectives

Increasing understanding about production, processing, marketing, distribution and
consumption trends in the nut and dried fruit industry.
Increasing market access by monitoring customs duties and trade barriers and advising by
EU governments on behalf of INC membership.
Assuring global quality standards and trading terms are within the framework of existing
national and international bodies and do not inhibit trade within the industry.
Promoting research, especially nutrition, education and new product development.
Promoting international cooperation by interacting with various public, private, national and
international organizations, which share our common goals.
Increasing goodwill and mutual understanding of the nut and dried fruit industry by joaining
international meetings in producing and consuming countries.
Providing a single source of annual statistical information from producing and







TARGET MARKET
EUROPEAN UNION
Italy
United Kingdom
Spain
Germany
France
The Netherlands


Italy:
The Italian apparent consumption of dried fruit is the highest of the countries reviewed. In
2006 the apparent consumption was calculated at 1,031 million / 217 thousand tonnes. The
consumption in value is more than 2.5 times as high as the UK, which rank second. The
volume of consumption is also the highest of the countries reviewed but the difference is only
small, indicating the consumption of more expensive products. Although convenience will
mainly drive the growth of the packaged and dried food market, note that Italians tend to
value taste over convenience when purchasing a food product.

The United Kingdom
The dried fruit market in the UK has enjoyed growth, benefiting from the ever growing
demand for snacking products and interest in healthy eating. UK sales of nuts, seeds and
dried fruit combined were estimated at 576 million in 2007 (MINTEL, market research
company). Please note that this figure cannot readily be compared with data provided by
Eurostat (Table 1.1), as here, nuts and seeds are also counted. The UK is a particularly large
consumer of sultanas and mixtures of dried fruit, which are added in cereals and cereal bars.
In the UK, many people skip their breakfast and compensate this during the day with snacks.
Healthy and conveniently sized and packed snacks are particularly increasing in popularity.
Therefore, new product design and line extensions will not only have to meet convenience
and 'enjoyment' needs, but also attract consumers who have long decided to slice breakfast
out of their daily routine.

Spain
The apparent consumption in Spain shows a slight decrease. In 2006 the consumption was
264 million / 82 thousand tonnes. Spain, compared to the other six markets, is a particularly
large consumer of dates, prunes,almonds and apples. Figs and apricots are also an important
part of the Spanish and Mediterranean diet. A wide range of dried fruit is also consumed
coated in chocolate, often sold in elegant presentation boxes and the delicacy is very popular

among the Spanish public. Interesting to note is that breakfast cereals remain unpopular in
Spain.

Germany
Germany is among the worlds largest food and beverage importers and is one of the most
important food processing countries in Europe, also for dried fruit. Germany is also Europe's
largest organic food market, an important niche market for dried fruit. Dried fruits are mostly
used in breakfast cereals and baked goods, but are also popular in snacks, which is a growing
segment in Germany as a replacement for breakfast and lunch. The apparent consumption in
Germany amounted to 199 million / 124 thousand tonnes in 2006, ranking the country as
the 4th largest EU consumer of dried fruits.
The presence of immigrant populations as well as tastes acquired when travelling abroad has
broadened demand for a greater variety of ethnic foods, including lesser known dried fruit.
After Japan, Germany is the worlds largest importer of dried prunes.

France

The apparent consumption showed a more modest development between 2002 and 2006
resulting in 123 million / 68 thousand tonnes in the latter year. The growth in the French
domestic market appears to be in line with rising popularity of dried fruits worldwide as
consumers give greater recognition to dried fruits as a healthy snack alternative. Since France
is the largest EU producer of prunes, it can be expected this product group is also an
important part of the French diet. In the French market consumers demand sophisticated
(ethnic), low-fat and quality products sold in attractive and practical packaging (Food and
Drink Europe). Although the French are pinpointed as being very demanding regarding
quality, industry sources stressed that price is a major factor in purchasing decisions within
many French packaged food sectors.

The Netherlands

The apparent consumption in The Netherlands is the lowest of the countries reviewed. In
2006 the apparent consumption in the country amounted to 37 million / 42 thousand tonnes.
When looking at the imports of dried fruit by The Netherlands, it can be concluded that
sultanas is the most important dried fruit product in the Dutch market. The Netherlands has
an important processing industry, for which dried fruit is used in breakfast cereals and bars.
The leading companies in the dried food are H.J. Heinz Company and Unilever. Under the
name SunDream FF snacken, the Dutch Nut Group released a product assortment based
on healthy snacking, consisting of a mixture of nuts and tropical dried fruits. The concept is
targeted at young people between the age of 12 and 22, for who obesity is an increasing
problem.
The Netherlands holds a strong position in the dried fruits trade and distribution. The reason
for this concentration is the relatively high costs of food safety control and documentation
associated with the import of dried fruits (and food products in general) into the EU,

regardless of the amount imported. Dried fruits are therefore often imported to a central
location and from there distributed to other EU countries.

PRODUCT LINE
These have, in recent years, become increasingly popular and more widely available. Dried
tree fruits comprise
Apples (peeled, cored, sliced; then cut into rings), has a chewy texture and is mainly
produced in the USA, Italy, China, Chile and South Africa.

Apricots, available either halved or whole, sharp or sweet, have a rich exotic flavour.
Mainly produced in Turkey, USA, Australia, South Africa and Iran.

Dates, renowned for their great nourishing properties. Main producers are Pakistan,
Iraq, Iran, Algeria and the USA.

Figs, a sweet, chubby dried fruit, yellow brown in colour. Mainly produced in Turkey,
the USA and Greece.

Peach, firm or tender, but fleshy and with a slightly sharp flavour, peaches are sold
either in halves or slices. Produced in the USA, Australia, South Africa and China.

Pears are sweet and chewy with a pleasant granular texture. Mainly produced in the
USA, South Africa, Australia, China and Chile.

Prunes (also referred to as plums) are a popular dried fruit in the EU. It is a rich, dark
dried fruit, available whole or pitted. Mainly produced in California (USA), Eastern
Europe, France, South America, South Africa, and Australia.

PEST ANANLYSIS


Political

In political analysis the dry fruit industry looks at the influence of the following things on
their business in Pakistan. It defines both formal and informal rules under which the firm
must operate.


TAXATION (CORPORATE; CONSUMER)
Dry fruit industry also analyzes the changing policy of taxation by the changing govt.
After granting the GSP status EU has reduced the taxes and has also increased the export
quota in favour of Pakistan.


ENVIRONMENTAL REGULATION AND PROTECTION
Analysis of environment is also necessary for dry fruit industry.


INTERNATIONAL TRADE REGULATION
Analysis of the roles of international trade in Pakistan is also done by the dry fruit industry.
Pakistani dry fruits exporter has must to obey the rules and regulations of legislative by EU
parliament and WTO.

CONSUMER PROTECTION
Consumer protection is also a main factor of social influence. EU has strictly parameter to
assure the quality of dry fruits. For dry fruits quality assessment PSP quality agreements are
already published by EU. DCCA (Dry fruit quality assurance authority) is also making sure
that qualitative Dry Fruit products are supplied to customer.

EMPLOYMENT LAW
Rules and regulations which are applied on the companies for the employees by the Govt of
Pakistan. EU enforces the Dry fruit exporter country that they should follow all the
mentioned rules and regulations regarding Human Laws, working conditions, attracted salary.
Excessive working hours will be banned according to rules and reregulation.

Economic

Economic growth
Monetary policy (interest rates)
Government spending (overall level; specific spending priorities)
Policy towards unemployment (minimum wage, unemployment benefits, grants)
Taxation (impact on consumer disposable income, incentives to invest in capital
equipment, corporation tax rates)
Exchange rates (effects on demand by overseas customers; effect on cost of imported
components)
Inflation (effect on costs and selling prices)

Social
Income distribution (change in distribution of disposable income;
Demographics (age structure of the population; gender; family size and composition;
changing nature of occupations)
Labour / social mobility
Lifestyle changes (e.g. Home working, single households)
Attitudes to work and leisure
Education
Fashions and fads
Health & welfare
Living conditions (housing, amenities, pollution)

Technological
Government spending on research
Government and industry focus on technological effort
New discoveries and development

Speed of technology transfer
Rates of technological obsolescence
Energy use and costs
Changes in material sciences
Impact of changes in Information technology


PRICING

The dried fruit market is not a commodity market and world market prices are therefore
determined (but not set) by importers and wholesaler. The dried fruit market is
characterized by high prices, but low margins. The high prices are to a large extent inherent
to the expensive and rather difficult production process, which requires large quantities of
fresh fruit and tight quality control.
Domestic and import/export prices of dried fruit vary according to a number of
factors:
Harvest output in the supplying countries in relationship to demand.
Negotiations between the different chain partners and the number of
intermediaries buying and selling.
The quality of fresh fruit (and vegetables) aimed at the consumer markets. When
quality is not up to standard, the products will be diverted to the industry for
processing, thus putting pressure on prices.

The quantities and the type of dried fruits in question.
Harvest output in relationship to demand.
Negotiations between the different chain partners and the number of
intermediates involved
The quality of fresh fruit aimed at the consumer markets. When quality is
good, the fresh market will consume most of the crop leaving the processing
Industry with a lack of raw material. When the products are not up to
Standard, the products will be diverted to the processing industry and put
Pressure on prices. Changes in supply (often weather-related) have a much
Larger effect on price levels than changes in demand.

There are several factors that influence price levels in European union. The major factor is

The international market that establishes prices based on quality, grade, and presentation
(Whole, pitted, sliced, etc.) And the method of drying which has been used prior to
Export. The major supplying country often determines the basic price reference point
For a particular product worldwide. For example, the USA and Chile are the
As a price taker Pakistani dry fruit exporters and processors set domestic prices for raw
Material suppliers and smaller-scale processors based on international market prices
(Figure 4). At the same time domestic prices are influenced by domestic demand
Forces that reflect the size of the local harvest. In years of low production, domestic
Prices are bid up while they fall when production is high. Therefore, given annual
Production variability, the competition with domestic demand during low production
Years becomes the decisive factor in the amount of product available


Fruit Country
Fair trade Minimum
Price
Fair trade
Premium
per kg

Farm Gate
per kg
Ex Works
per kg
FOB
per kg

Dried
Apricot
Conventional
Pakistan
0.37
(excluding
transport
to the
factory)

0.09
Dried
Apricot
organic
Pakistan
0.39
(excluding
transport
to the
factory)

0.09
Dried Wild
Apricot
Conventional
Pakistan
0.24
(excluding
transport
to the
factory)

0.06
Dates, to be
processed
(dried)
conventional
Tunisia 0.81

0.15
Dates, to be
processed
(dried)
organic
Tunisia 0.89

0.15
Dried Mango
organic
Western
Africa

5.20 6.40 0.70

Dried
Pineapple
Conventional
Uganda
2.96 0.29
Dried
Pineapple
Organic
Togo
8.40 0.60
Dried
Raisins
Conventional
South Africa 0.43

0.07
Dried
Sultanas
Conventional
South Africa 0.43

0.07



PORTER FIVE FORCES MODEL IMPLICATIONS
Threat of New Entrants

Highly regulated markets
Limited pricing power
Easy financing options
Rising demand for authentic halal food due to rising Muslim population

Bargaining Power of Suppliers

Food prices in dry fruit industry largely depend on global prices as the region imports
most of its food requirement
Low supplier concentration
Adverse input price fluctuation might dent profitability

Threat of Substitutes

Large companies enjoy economies of scale
Dry Fruit Industry food industry is dominated by large companies
Diversified offerings
Less elastic to price changes

Bargaining Power of Buyers

Highly differentiated offerings as large companies continue launching variants
Very few players in a particular food segment
Highly regulated pricing system

Competition

Low barriers to exit
High scope for growth aided by rising population, disposable income
Competition is tougher with established players

CONCLUSION of PORTER FIVE FORCES MODEL
IMPLICATIONS

We have analyzed the Dry fruit sector using Porter's Five Forces model, which suggests that
food players operating in the region face medium threat of competition. Moreover, product
differentiation and diversified offerings keep the competitive forces under check. However, a
young and growing population, increasing disposable income, rising tourism levels, and
changing trend toward consumption of healthy food make the sector attractive for all players