Pakistan – Afghanistan Cross Border Trade Meeting

Day 1 - Opening speeches

After recitation of the Holy Quran, Interim Country Director Sofiya Khan opened the workshop and welcomed participants, especially:

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  Mr. Muhammad Ayub Sheikh, Federal Secretary Health
  
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  Honorable S.A. Nasir Yousofi, Deputy Head of Mission, Afghanistan
  
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  Mr. Muhammed Aslam Shaheen, Chief Nutrition Section, Planning Commission
  
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  Dr. Baseer Khan Achakzai, Director Nutrition, Ministry of National Health Services, Regulation and Coordination
  

Dr. Wahdati emphasized Afghanistan’s reliance on food imports from Pakistan for cultural, ethnic, religious and historic reasons, including fortified wheat flour and edible oils imported from Pakistan.

He hoped the meeting would lead to actions to ensure that all foods exported from Pakistan to Afghanistan would be fortified. He called for solutions that could be both commercially viable in Pakistan and have a public health impact for the Afghan population. “In the name of the closeness of our culture, faith and long historic relationships, we came here to plead to the Pakistan Flour Mills Association and the Pakistan Vanaspati Manufacturers Association to fortify their products exported to Afghanistan, and to contribute to help improve the health of the Afghan population”, Dr. Wahdati concluded.
Muhammad Aslam Shaheen, Chief Nutrition Section, Planning Commission, Pakistan

Mr. Shaheen highlighted the role of the “Scaling up Nutrition” (SUN) Movement created in 2010 in bringing people from governments, civil society, the United Nations, donors, businesses and researchers together in a collective effort to improve nutrition. Pakistan joined the movement in 2013 as the 34^th out of 57 SUN country members. Pakistan has also adopted the sustainable development goals (SDG) in 2015, and is committed to achieving them, in particular Goal 2 to “end hunger, achieve food security, and improve nutrition, and promote sustainable agriculture”.

Mr. Shaheen urged participants to utilize this forum effectively and continue using these newfound linkages between the two countries to tackle malnutrition together. He concluded that “assuring the quality of food products, especially their safety and nutrition levels, is an increasing focus of the government, companies, and global international trade. A better understanding can help to address key questions related to food fortification of wheat flour and oil”.
Dr. Baseer Khan Achakzai, Director Nutrition, Ministry of National Health Services, Regulations and Coordination and Secretary National Fortification Alliance, Pakistan

Dr. Baseer presented GAIN's mission and the global significance of eradicating micronutrient deficiencies, emphasizing the importance of fortification as a cost effective method to eradicate micronutrient deficiencies or “Hidden Hunger”.

Mr. Yousofi stressed that iron deficiency in the region is still a problem, and the workshop can help find new approaches to address it. He urged the Government of Pakistan to encourage and stimulate trade between the two countries, indicating that closing the borders to trade, as had happened recently, does not work in the interest of both countries. In order to encourage economic cooperation, he announced that Afghan Consulates in Pakistan will grant a one-year visa to all Pakistan businessmen who apply for a business visa.

Mr. Sheikh highlighted the importance of food fortification and his belief that we must reemphasize that under-nutrition affects most of the countries in central and South Asia. In Pakistan and Afghanistan, the severity of micronutrient deficiencies portrayed in NNS 2011 were sobering. If not addressed in a timely manner, under-nutrition would affect the future development of both countries.

He added that malnutrition is directly related to development. By targeting malnutrition today, we are investing in our future. He acknowledged that food fortification is a proven long-term intervention for addressing malnutrition, and that fortification of wheat flour, oil and ghee, as primary sources of food in the region, can increase dietary intake of essential micronutrients. Food fortification in Pakistan will not only be beneficial to Pakistan itself but to Afghanistan equally. He acknowledged the importance of NFA as a key platform for bringing stakeholders together to address malnutrition. He assured the Government of Pakistan’s support, whether through policy formation, harmonization of standards or any other legislation necessary for mandatory fortification.

Day 1 - Presentations and discussion

Mr. Islam explained that PVMA is an organization registered with Directorate General Trade Organization, Ministry of Commerce, Government of Pakistan. Its 118 members manufacture vegetable ghee/cooking oil and allied products in all four provinces and the federal capital - 50 in Punjab, 41 in Sindh, 2 in Baluchistan and 25 in KPK. Annual turnover of the oil and ghee sector is of 600 billion Pakistan rupees (Rs) per annum and total duties, taxes and other levies paid to government is about 120 billion.

Per capita consumption of edible oil and ghee in Pakistan is 17 Kg and total consumption is 3.8 million, with local production of 0.6 -0.7 million tons. To fulfill the need for edible oil, 17% and 83% of palm oil has been imported from Indonesia and Malaysia respectively in 2015. On import, 16% CED, 5.5% income tax and 1000 Rs /MT FED has been applied. There has been substantial increase in imports of edible oils every year i.e. 5.74% in 2014 compared to 2013 and 10.45 in 2015 compared to 2014. Production at oil and ghee mills adheres to PSQCA standards in which 33000 IU / Kg ± 10% of Vitamin A is mandatory.

Mr. Islam outlined the challenges facing the industry:

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  Higher duty/taxes and other levies increase end-product price, lowering per capita consumption.
  
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  In April 2015, the Government of Punjab capped the retail price of licensed, branded and fortified ghee/cooking oil, making it lower in most cases than the cost of production. Sales of non-fortified ghee have increased to fill the vacuum created by the lack of licensed, legitimate products.
  
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  Due to economic hardship, families prefer to buy ghee/cooking oil in loose packing (non-branded, non-refined and unfortified), widely available with a price differential of at least 20%.
  
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  Pakistan exports significant amounts of edible oil and has no control on price fluctuation in international market. Traders monitor edible oil trading prices, buying and keeping unprocessed loose oil in stock in unhygienic conditions. As a result, the free fatty acid (FFA) level rises and the oil loses all intrinsic Vitamin A and other nutrients.
  
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  Sales of fortified, processed and packed products is stagnant, while sales of loose oil are increasing.
  
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  Legislation regarding fortification exists, but its implementation needs to be strengthened.
  
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  The prevailing tariff structure, trade and commerce policies, and national market forces are in favor of selling loose oil and discourage fortified packed products.
  
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  Duty structure on import of vitamins is very high, reportedly up to 55%.
  

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  Reducing duty/taxes/levies on ghee and cooking oil from the current high range of 32-37%.
  
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  Making the sale of loose ghee and cooking oil illegal, with strict enforcement by authorities such as the Pakistan Standards and Quality Control Authority and Provincial Food Authorities.
  
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  Improving the capacity of PSQCA and Provincial Food Authorities to reach remote areas where there are problems in implementing ‘Pakistan Standards’ PS 221 and PS 2858 for Ghee and Cooking Oil by allocating extra funds and additional qualified manpower.
  
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  Working with NGOs to ensure consumers are educated and educate others about their right to access to nutritious staple food items, both those who cannot afford a nutritious diet, and those who don’t understand the benefits of food fortification.
  

Mr. Raza spoke about the current fortification situation in Pakistan and the efforts of flour mills in producing fortified wheat flour and the challenges faced by the millers, especially those exporting wheat flour.

Following discussions with GAIN, PFMA began fortification at 30 flour mills last year in Punjab. There are now more than 250 micro-feeders at the mills, but the issue of premix supply must be resolved so that fortification can move ahead. Flour millers and PFMA are fully aware of the importance and benefits of food fortification and are committed to playing their part.

Session 1, Presentation 3: Current status of export of wheat flour to Afghanistan and future perspectives

Mr. Anjum Sardar, Deputy Secretary Technical, Punjab Food Department, Pakistan

Mr. Sardar outlined the work of the Punjab Food Department’s quality control laboratories and technical teams and highlighted progress in the export of wheat and wheat flour, including the issuance of a wheat/wheat flour export notification; discussions with GAIN on monitoring the quality of wheat flour exported to Afghanistan; equipping food laboratories with necessary monitoring equipment; and the constitution of a provincial fortification alliance.

On the way forward, he suggested creating market demand for fortified flour in Afghanistan through an advocacy campaign; elimination of duties on premix; the introduction of a standard for fortification, labeling and packaging by the Afghan authorities, and production and supply of fortified flour to meet the demand. He also stressed the need for quality assurance by manufacturers and government regulatory bodies
Mr. Mehrab Khan, Additional Secretary, Food Department, Government of Baluchistan, Pakistan

Mr. Khan said Baluchistan Food were already facilitating their mills and would also extend facilitation to mill owners to promote the export of wheat flour and edible oil to Afghanistan. Their laboratories could certify the quality of their products. He appreciated the interventions taken by GAIN and assured the audience of his support wherever required.

Mr. Khan stated that after the 18^th amendment, the Government of Baluchistan has taken responsibility of the entire preventive program including issues of malnutrition, and malnutrition as a priority. Malnutrition contributes to Baluchistan’s high rates of infant and maternal mortality, and the government is working to address this, with a dedicated nutrition program at provincial level.

Mr. Khan stressed the importance of fortifying staple foods in eradicating micronutrient deficiencies in Pakistan and Afghanistan. Fortifying staple food in Pakistan will support Afghanistan because Pakistan is one of the major exporters of wheat and edible oil to Afghanistan. He said that we have to find the opportunities to fight micronutrient deficiencies and expand cross-border trade through meetings such as this.

Mr. Muhammad Anwar Khan, Director Food Khyber Pakhtunkhwa, Pakistan

Mr. Khan said that flour mills association from KPK is well aware of the problem of malnutrition and their responsibility in this regard. He aacknowledged the current price related problems of the flour industry and suggested that a farmer awareness campaign should also be launched to balance the prices. He explained the dual role of Food Department in procurement of wheat and price as well as quality control of wheat and flour in KPK. He committed to extending support for flour millers by resolving their issues through regular meetings. He asked the Afghan delegation to promote Pakistani flour in their country as it is superior in quality and will also be fortified which is their requirement.

Dr. Saleem asserted that food fortification is the most convenient and cost effective method to deliver micronutrients to deprived communities. In Pakistan, there are high rates of anemia reported in women and children and the remedy is iron fortification. He requested the business community to realize their corporate responsibility and take a step forward towards food fortification and assured the cooperation of the Health Services Department wherever required.

Dr. Ali stressed the importance of the meeting for industrial growth in Pakistan and Afghanistan. He described the role and strengths of PCSIR and its achievements during past few years with special reference to the food fortification industry. He mentioned the strengths of his laboratories and facilities and their ability to provide support services to the industries.

Dr. Ludin reviewed improvements in the health of the Afghan population between 2004 and 2013. Stunting dropped from 60.5% to 40.9%, iron deficiency in women 48% to 24% and iodine deficiency in women 75% to 41%. Anemia among women of reproductive age is 40.4% of which IDA is 24%. Other micronutrient deficiencies in women of reproductive age include vitamin A 11.3%, vitamin D 94.8%, Zinc 23.4% and iodine 40.7%. Among children from 6 to 59 months of age, total anemia is 44.9% out of which IDA is 26.1%. Other micronutrient deficiencies include vitamin A 50.4%, vitamin D 81.0%, Zinc 15.1% and Iodine 29.5%.

The National Nutrition Policies and Strategies of Afghanistan have prioritized fortification of wheat flour with iron; edible oil and ghee with vitamin A & D; and edible salt with Iodine. Since USI become mandatory, donation of potassium iodate supply has been shifted to a revolving fund managed by the Iodized Salt Factories Association. 68,000 MT of iodized was been produced in 2013. Fortification of edible Oil and Ghee with Vitamin A and D started a few months back. There are three local manufactures and all have micro-feeders installed. The process of drafting legislation for fortifying edible oil with vitamin A and D is under way. During 2015, Pakistan ranked as the second biggest oil exporter to Afghanistan after Malaysia.

Wheat flour fortification, which began in Afghanistan in 2006, covers just 5% of overall need. Afghanistan requires fortification with Iron, Folic Acid, Zinc, Vitamin A and Vitamin B12. The MOPH/PND has established standards for QA/QC of millings. Legislation of wheat flour fortification is also in process. The production trend of wheat fortification is quite significant and communication campaigns will be launched. Challenges and constraints include low quality and quantity of locally produced wheat flour; lack of attention on imported wheat instead of flour (which are not fortified); and lack of awareness and commitment among traders to import fortified instead of non-fortified flour from neighboring countries.

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  Implementation of mandatory national standards of fortified foods with minerals and vitamins which are approved and finalized by the Afghan National Standard Authority;
  
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  Supporting, strengthening and monitoring the activities of the manufacturers and importers of fortified wheat flour and edible oil in accordance with the provisions of this regulation and other applicable laws of the Islamic Republic of Afghanistan;
  
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  The importer shall gain the fortified wheat flour import permit and license from the Ministry of Commerce and Industry. No importer will have the right to import non-fortified wheat flour six month after enactment of this regulation;
  
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  Imported fortified wheat flour must be fortified with vitamins and minerals according to or matching with national standards;
  
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  The amount and specifications of the vitamins and minerals must be in compliance with the rules and norms set by the ANSA or matching the standards (complete the national standard requirements);
  

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  Any Sack(Package) of fortified wheat flour must include the label indicating type and the amount of micronutrients, manufacturing company, name of original country, and any other necessary trade specifications, it would be desirable if the text “according to Afghanistan national standard “was written on the package in the local language;
  
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  All imported fortified wheat flour should be quality controlled at the borders, and only those who have certificates from MoPH related quality control labs that certifying that the amount of vitamins and minerals in imported flour is accordance with to or matching with national standards will be allowed to enter (complete the national standard requirements).
  

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  Supporting in-country production of fortified wheat flour and edible oil;
  
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  Regional coordination to help support the governments of Afghanistan and Pakistan in finalizing their policy on importation of wheat instead of flour;
  
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  Strengthening coordination & collaboration among governments to import fortified food (iodized salt, fortified wheat flour & edible oil);
  
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  Increasing awareness among traders and the public on the importance of food fortification.
  

Ms. Panagides presented the findings of Afghanistan 2013 Nutrition Survey, focusing on micronutrient deficiencies. Looking at the 2011 national nutrition survey in Pakistan, she concluded that both countries have similar nutrition epidemiologic profiles where micronutrient deficiencies reach prevalence levels of public health significance according to WHO classification. The similarity between the two countries is also found in the food consumption patterns, where wheat flour and edible oils compose the bulk of the dietary intake in terms of energy, and other macro nutrients.

Analyzing the food trade data between the two countries, Dora concluded that Pakistan is an important exporter of wheat flour edible oils to Afghanistan. Given their physical characteristics and level of consumption, “these two products are ideal vehicles for food fortification with the essential vitamins and minerals that are deficient in the diets of both countries”, said Dora. These considerations were the basic foundation for the design, planning and implementation of the regional food fortification projects in both countries. She highlighted the objectives and strategic approach of the project in Pakistan, and emphasized the need for coordination with the DFID SNIP project at the policy, operational and implementation levels.

Session 1, Presentation 6: Update: Afghanistan Regional Fortification Project,

Dr. Mohibullah Wahdati, Country Director, GAIN Afghanistan

Dr. Wahdati informed the audience that the flour fortification has been mandatory since October 2015and stressed that these initiatives would have a major effect on improving health and trade in the region. He described the prerequisites for fortified food export. He explained that the cost of fortification is limited as 1% of 10Kg oil and 2% of 50Kg wheat flour bag which can be easily digested by the importers. Producers should take the lead on fortification.

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  Establish proper record keeping system at point of production;
  
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  Improve awareness of exporters and importers on how best to export and import fortified quality, safe foods, ensuring their share in the Afghan market;
  
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  Food regulation authorities in both countries must follow the WTO guidelines on food trade;
  
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  Increase engagement for legalization of trade between the two countries;
  
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  Enact mandatory fortification standards for industrially produced edible oils and wheat flour (locally produced and imported);
  
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  Harmonization of regulations and enforcement mechanism with regional countries;
  
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  Finalize and approve food law that includes regulatory monitoring framework for checking adequacy of fortification and compliance, including a system for enforcement of mandatory legislation;
  
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  Create an enabling environment for local production;
  
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  Ensure effective supply of fortification premix;
  
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  Establish a system for tracking the quality, coverage and impact of population-based nutrition interventions, such as food fortification.
  

An interactive and fruitful discussion permitted participants to debate the regulatory requirements for the export of fortified wheat and edible oil.