In Pakistan, coffee is becoming more and more popular, especially among younger people, who drink it hot instead of other drinks. Its high price is partly due to the high tariffs on coffee, though, which makes the expansion of the national coffee market difficult.
Colleges, universities, and workplaces are full of young people who clearly enjoy coffee. This suggests that as the number of young people increases, their tastes will change.
The Pakistani coffee lover and specialist in advertising, Faizan Tariq, says he wishes coffee was as cheap as tea. He questions why coffee prices are not more competitive, similar to those of tea, given its appeal as a hot beverage for working late into the evening.
When the semester system started in college, Punjab University student Amna Tariq resorted to coffee. She views coffee as a lifeline during exam season and depends on it to keep her energized throughout strenuous university responsibilities. Still, she wishes coffee, like tea, was more reasonably priced on weekdays.
It is estimated that by 2025, the global coffee market would be worth $85 billion, with 2.25 billion cups consumed daily. Pakistan must assess and reorganize its tax system as a developing coffee market. After customs, additional customs, and regulatory duties, the total duty on finished coffee goods is currently 53%, while bulk imports are subject to a tariff of 28%. But just thirteen percent of the tariff is applied to tea.
High duties not only prevent the coffee industry from expanding, but they also make it difficult for legitimate companies to make investments, which encourages the formation of the black market. Legal coffee-making enterprises cannot match the cost of foreign coffee brands that are smuggled because they have to pay taxes and duties.
SRO 237, which was issued in 2019, also states that products must have a minimum shelf life of 66 percent at the time of import, ingredient labeling in both English and Urdu, and halal certification from recognized authorities in addition to meeting certain logo and labeling specifications. All of these requirements are violated in this scenario. Provincial and federal governments are in charge of ensuring conformity at the retail level and during importation, respectively.
A chance exists in Pakistan to localize, assemble, manufacture, and brand coffee with the possibility to export it, given the rising public consumption of the beverage. It is worth noting that a prominent global multinational coffee producer is already present in Pakistan and could be well-positioned to take advantage of this favorable circumstance. A major factor in fostering an atmosphere that supports these kinds of initiatives is the government.
Also, Pakistan can grow coffee; in fact, the Pothohar region of the country has a climate that is ideal for coffee growth. In addition to creating job opportunities, this might unlock economic potential and diversify Pakistan’s agriculture value chain. It is necessary to streamline the bulk coffee duty structure in order to assist this, as doing so will draw in foreign investment, promote value chain development, and encourage innovation in the coffee industry.
The coffee market in Pakistan is expanding, but in order to fully realize the industry’s potential, it is imperative to reform the duty structure, encourage localization, and strengthen coffee cultivation.
