KARACHI, March 20: Pakistan’s export trade is likely to come under severe strain from the US-led war against Iraq launched on Thursday and business leaders now fear that the 10.4 billion dollars export target for current fiscal year may remain unrealized.

They fear that the war will have drastic impact on Pakistan’s economy particularly on the international trade as sooner or later the international sea routes of the country are bound to come under pressure.

Businessmen apprehend that any rise in international oil prices would push up shipping freights. Then there is always a lurking fear of imposition of war risk surcharge. Besides, an increase in international oil price will push up domestic energy tariff and escalate domestic production cost rendering products uncompetitive in the export market.

The president, Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Riaz Ahmed Tata claims that “export orders have been suspended and we do not hope to get fresh orders from the European market under such circumstances.”

He said shipments to Europe and America through Suez Canal would be affected.

Pakistan exports 30-35 per cent of its products to the European Union nations and 20-25 per cent to Gulf Region. “Eruption of war will create problem for us,” he added.

Pakistan’s major exports to Saudi Arabia in 2001-2002 stood at $330.4 million followed by $720 million to Dubai, $58 million to Kuwait, $47 million to Oman, $43 million to Bahrain, $30 million to Iraq and $35 million to Yemen. “The war means loss of foreign exchange earnings to these potential markets,” Tata said.

He said export target of $10.42 billion seems unachievable under present situation as export to Middle East would be suspended as long as war continued.

The president, Karachi Chamber of Commerce and Industry (KCCI), Mian Nasser Hyatt Maggo told Dawn that “foreign buyers have now adopted a wait and see attitude in giving fresh orders. They have put on hold new orders from Pakistani buyers owing to growing uncertainty in the region.”

“Both exporters and importers are not doing any new work as they are confused over the duration of US-led Iraq war,” he said adding that importers have now become reluctant to open fresh letters of credit (L/Cs).

The chairman, Korangi Association of Trade and Industry (KATI), S.M. Naseer said that it was hard to tell at the moment that the export orders had come to a standstill in just one day of war.

“The impact of war has not been felt on the first day. However, it will definitely hit the future export orders for Pakistan in case the war prolongs,” he said fearing shortfall in export target of $10.42 billion for the current fiscal.

Pakistan’s export in July-February 2002-2003 went up by 19 per cent to $6.916 billion as compared to $5.8 billion in the same period of 2001-2002.

He said exports to Far Eastern countries would not be hurt as compared to exports to European and Middle East countries. He said export of perishable items would definitely get a jolt in case the war concludes in a month or two.

Sources said that as many as 237 documents were processed at the Export Examination East Wharf and the situation remained normal even in the West Wharf. Sources said around 200-225 export documents were processed at the Export Collectorate, Air Freight Unit and things remained normal.

Ship movements at Karachi Port and Port Qasim remained brisk on Thursday as five ships sailed and an equal number of vessels took berth at Karachi Port. Four ships are expected to sail and while six ships carrying chemicals, gas oil, palm oil, containers and steel oils are expected to arrive in next 24 hours.