Fruit and Vegetable Pulping in Pakistan – Review and Prospects – June 2024

The global demand for fruit and vegetable pulp is increasing due to higher consumer awareness of its health benefits and the growing popularity of processed food products. Despite being a significant producer of fruits and vegetables, Pakistan lacks value-added processing capabilities in its pulping industry. This report investigates the challenges and opportunities within Pakistan’s pulping sector, offering policy recommendations to unlock its potential.

Pakistan is currently a small exporter of pulped products like orange juice and mango derived products, and an importer of pulps for industrial use, primarily tomato pulp for making ketchup. To boost exports and reduce dependency on imported pulps, Pakistan needs to enhance product quality and utilize spare capacity for pulp production which complies with international standards and fulfills local demand. Only three percent of Pakistan’s fruits and vegetable produce is processed into value-added products. Furthermore, industry experts estimate that of Pakistan’s total pulping capacity of around 100,000 tons per annum, only 30 percent is currently being utilized.

Pulping presents an opportunity to increase farmer income by utilizing low-grade fruits, reducing wastage, and promoting fruit and vegetable cultivation. It is also worth noting that horticulture is relatively more water-efficient and offers higher productivity per unit of water.

The industry relies mainly on imported machinery, as locally fabricated equipment fails to meet international standards. Import duties on pulping machinery hinder technological advancement, calling for reforms to reduce costs and promote local manufacturing. Rationalizing the duty structure can help promote the use of advanced and internationally accepted technologies. For example, the availability of advanced technologies such as aseptic packaging and freezing can enhance product quality and global competitiveness of pulped and packaged products made by Pakistan.

The decline of investment in the pulping sector due to waning demand highlights the importance of maintaining policy stability and favorable business conditions for industrial growth. The imposition of additional taxes has created uncertainty and deterred investment, hampering the sector’s potential for expansion and innovation. Addressing policy issues such as high tax rates and regulatory hurdles is crucial for fostering a conducive environment for the sector’s growth. Policy recommendations include rationalizing local taxes and import duties, providing financial incentives, promoting local demand, strengthening quality regulations, and enhancing border controls.