September 11, 2002	Wednesday	Rajab 3, 1423

KARACHI, Sept 10: Pakistan’s commodity trade was terribly disrupted after the terrorist attacks on the World Trade Centre and Pentagon on Sept 11 last year, as the major business centres were in virtual turmoil and the consequent drying up of import and export channels for several weeks.

Pakistan’s foreign trade also remained standstill for about four months as importers and exporters were more worried over the security problems rather than trading.

And the US-led coalition attack on Afghanistan against war on terrorism followed by shipping problems, hike in freight rates and imposition of war risk charges by the world shippers further aggravated the situation on the foreign trade front.

“Despite a total disruption in import trade and higher costs, it goes to the credit of local commodity traders, who did not indulge in price hike of imported stuff and kept them around the pre-Sept 11 levels as far as possible,” says a leading commodity trader. Normal trading activity resumed after sanity returned to the foreign markets.

A six per cent decline in the annual import bill of about $3 billion of petroleum products on the state level reflects that supplies were orderly despite shipping problems. However, prices at the retail level were either-way adjusted under the official pricing formula, which includes a number of local costs and does not necessarily indicates the world price trend.

The world oil prices at the peak of crisis hiked to $32 per barrel at one stage and there were fears of further escalation but there was no relative rise in the local selling prices.

“The counter market forces were, however, at work after normal foreign trade was resumed and standoff on the letters of credit front was broken sometime in February this year,” importers of pulses and chemicals said.

Although imports of most of the commodities remained suspended for about four months since attack on Afghanistan, there was no abnormal rise in most of the imported consumer stuffs.

Gold was an exception, price of which showed steep rise to Rs6,300 per 10 gram at one stage, but was remaining stable between Rs6,000 and Rs6,100 from the pre-Sept 11 average rate of Rs5,400.

Among others, two factors attributed to the price flare-up — massing of Indian troops on the international borders and suspension of informal import by India and strong local investment demand stemming from the weakness of the US dollar.

Prices of pulses, notably masoor, whole and masoor dal, gram and some other types, which Pakistan imports, for instance rose modestly after early fall but there was no panic buying either by the wholesalers or the retailers at any stage of the Afghan war and disruption in supplies.

Prices of sugar also fell from the pre-Sept 11 peak level of Rs2,300 to Rs2,140 per 40kg but wheat and rice rose on higher exports after remaining depressed prior to the attack on WTC.

Industrial inputs, mostly chemicals and dyes were a bit expensive from the Western world but cheaper supplies from China and India allowed the industrialists to tailor their overhead costs accordingly as was reflected by 27 per cent increase in exports during the last fiscal.— M.A