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KARACHI: The current high demand for US dollars by importers is being attributed to a different reason linked with the Western sanctions on Iran.
Importers of commodities especially gram and other pluses said a vacuum had emerged on supply side prompting them to book more quantities as smuggling of these commodities to Iran was thriving following sanctions imposed by the Euro-pean Union and US causing shortages in the local market.
However, wholesalers said this could be one of the reasons however the main reason was a shortfall of local production of gram.
“I know many importers who have booked more quantities of gram and pulses that could be in the range of 10 to 12 per cent,” Anis Majeed, Chairman Wholesale Grocers Association told Dawn on Thursday.
He said the main crop of gram could be short this year compared to last year which is one of the main reasons for shortage of this commodity in the market.
He said the smuggling to Iran is not as large as the shortfall is expected this year. Pakistan used to import gram, peas and pulses each year but the main import is gram which has a very large market in the country.
“Each year we import 50 per cent of total requirement of gram. This year the import may exceed up to 15 per cent,” said Anis Majeed. Pakistan’s yearly import of gram is half a million tons while consumption is about one million tons.
However, another importer said the shortfall was also due to smuggling of gram and pulses to Iran as demand is high and prices are attractive.
“The demand for dollars is high because the importers of gram and pulses are buying larger quantities over the previous year mainly due to smuggling of these commodities to Iran,” said Anwar Jamal, a currency dealer.
Mohammad Atif, currency dealer at the inter-bank market, said demand for dollars was mounting for higher imports and less inflows. However, he did not know commodity importers were buying more dollars or the others.
Another commodity importer Munir Aalam said the market would witness a shortfall of gram and pulses within a month. “We have information that these commodities are going towards Iran,” he said.
Pakistan and Iran have recently negotiated a trade deal on barter system. If the agreement is finalised, Pakistan could import oil from Iran on export of wheat and sugar.
Iran is in dire need to save its foreign exchange reserves since the income from oil has drastically fallen after sanctions.
Pakistan is also facing the crunch on external front since its foreign exchange reserves have been falling while the inflows have dried up.
