April 10, 2003	Thursday	Safar 7, 1424

KARACHI, April 9: Pakistan has suffered a slight drop in export orders due to the Iraq war and a new war risk surcharge on shipping has squeezed margins, but traders and officials said annual exports would be on target.

Pakistan has a target of $10.4 billion exports for the current fiscal year and traders said on Wednesday it remains achievable.

“Some of my in-hand orders have been suspended, but they are not cancelled,” Mirza Ikhtiar Baig, a leading textile exporter, told Reuters.

Pakistan’s total July-March exports were up 20 per cent at $7.859 billion compared with $6.538 billion recorded in the same year-ago period.

However, exporters say war risk surcharge will put extra pressure on their margins, which are already hit by a rise in the rupee to Rs57.74 per dollar from Rs64.25 in mid-September 2001.

“Our profitability was already hit by rising rupee and now war risk surcharge will further squeeze margins,” Baig added.

A senior official at the Export Promotion Bureau said shipping companies imposed a war risk surcharge for cargoes bound for the Gulf region and Kuwait since the start of April.

He said the surcharge ranged from $30 to $130 on a 20-foot container and from $60 to $150 on a 40-foot container.

“Our exports to countries like Iraq, Kuwait and Syria have stopped after the war, but this will not have much impact because these three countries account for just over one per cent of our total exports,” said the official who asked not to be named.

“Export shipments to other Gulf countries and our major markets including the US and Europe are going normally.”

In its latest economic report last month, the State Bank warned there would be some short-term impact on exports due to the Iraq war as buyers looked for suppliers outside the war-affected region.

But exporters say despite some drop in export orders and increased cost they are confident Pakistan will be able to meet its export target.

“The 20 per cent export growth we have seen this year, will help us to achieve our target,” said another exporter Majyd Aziz. “And with war in Iraq nearly over, I don’t expect any long term negative impact on the exports.”

He said textile products, which constitutes over 60 per cent of total exports of the country, were doing “fairly well” in the United States and Europe.—Reuters