November 6, 2001	Tuesday	Shaba’an 19, 1422

KARACHI, Nov 5: War-risk shipping insurance surcharges and an appreciating rupee have badly hit Pakistan’s rice exports, traders said on Monday.

“We are gradually losing our markets,” said Haji Majeed, a rice exporter in Karachi.

International insurance companies started charging a war risk insurance surcharge of $100 per container, or $5 per ton, on all cargo destined to and from Pakistan from late September following the suicide plane attacks on New York and Washington.

The rupee has gained over Rs2.50, or around four per cent, against the dollar on the inter-bank market since September 11.

Traders were unable to say by how much exports had dropped, but stressed traditional markets in Africa and Bangladesh had recently been almost impossible to penetrate due to higher costs.

“A few exporters are shipping cargo to complete old commitments...but new orders are almost non-existent right now,” a trader said.

An exporter in Karachi said international buyers were asking for a sale price of $135 per ton from Pakistan, which was not acceptable.

“We are incurring an additional cost of approximately $12 to $14 per ton because of the gain in the rupee value and war-risk surcharge,” he said. “Our export price is around $156 per ton, which nobody is accepting.”

Haji Majeed said Indian exporters had grabbed orders from Pakistan’s traditional rice markets in Africa.

“Indian exporters are capturing export orders from African countries...(as) their government has subsidised the prices of rice for export purposes. Indians are quoting as low as $130 per ton, which we can not match,” he added.

Exporters said they had also lost rice demand from Bangladesh, worth around 250,000 tons this year, as Myanmar had stepped in with offers of $129 per ton.

In the domestic market prices were mixed on prevailing uncertainty with traders seeing increased downward pressure in coming weeks as new crop arrivals picked up steam.

“Fresh arrivals from Punjab would start from next week and after that low domestic prices could help exports...but nothing would happen before December,” Haji Majeed said.

Pakistan’s rice crop-year runs from April to November and the government has targeted exports of three million tons in the fiscal 2001-2002, compared to the previous year’s 2.4 million tons.

The country is expected to produce 4.3 million tons from its new crop, while domestic demand is put at 2.3 million tons annually.—Reuters