PAKISTAN’S exports to Qatar remain intact so far, showing no signs of an immediate fall in the aftermath of a diplomatic and political row between Doha and other Gulf Cooperation Council (GCC) countries.
Merchandise exports to Qatar slipped to $52.6 million during the last fiscal year from $59.9m in 2015-16, according to data released by the State Bank of Pakistan.
However, the decline “has nothing to do with the latest political development in the GCC region”, says a senior official of Trade Development Authority of Pakistan (TDAP).
Officials say the drop simply reflects a general weakness in Pakistan’s overall exports, exports to Qatar have already been on a gradual decline since the fiscal year 2010-11 after hitting a high of $116m.
Brushing aside concerns regarding the impact of a political crisis in the GCC region, officials point out that exports to Qatar in fact increased nearly 12 per cent to $5.6m in June, chiefly due to larger shipments of rice, leather products and shipping machinery.
The Gulf crisis began on June 5 when several countries including Saudi Arabia, Egypt, Bahrain and the United Arab Emirates (UAE) severed trade and diplomatic relations with Qatar, citing the country’s alleged support for terrorism as the main reason.
“The ongoing diplomatic crisis may or may not have an impact on our exports to Qatar. But so far we haven’t seen signs of decline that can be attributed to it,” says another TDAP official.
“The ongoing diplomatic crisis may or may not have an impact on our exports to Qatar. But so far we haven’t seen signs of decline that can be attributed to it,” an official says
A Pakistani business delegation, led by president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), recently visited Doha. But even during this visit the Pakistani businessmen didn’t share with the Qatari side any fear regarding the possibility of a decline in exports, officials say.
But analysts warn that the increase in June proceeds to Qatar should not be taken as a sign that the Gulf political crisis has not weighed down on exports. This is because the bulk of orders must have been booked prior to the beginning of the crisis, and only the trade data for July onwards would establish whether our exports to Qatar have remained intact.
Exports of meat and meat products to Qatar did fall in June, but it’s too early to say whether it had any connection with Pakistan’s role in defusing the diplomatic row in which the country’s meddling was appreciated by Saudi Arabia and the UAE but disliked by Qatar.
Exports of fresh or chilled beef to Doha dropped around 23pc to $413,000 in June, but were well above the monthly average of about $340,000.
Exports of frozen beef took a deeper plunge of nearly 80pc during the month, amounting to just $19m. Exports of sheep or goat meat (frozen and chilled) also declined 18pc to $93m.
Data of frozen chicken and chicken products being exported to Qatar by K&N’s and Big Bird do not appear in official statistics as the value of these exports are nominal, industry sources say.
But according to media reports, during the FPCCI delegation’s visit to Doha in mid-August, Pakistani businessmen explored the possibility of boosting exports of chicken and chicken products as well.
Officials of TDAP say meat exports to Qatar and even to other GCC countries are declining for different reasons that have nothing to do with the current diplomatic and political crisis in the Gulf.
The reasons include delay in the halal certification and issues in hygienic processing, poor packaging and marketing, delays in export cargo shipments at Karachi port, and higher port charges that affect our price competitiveness.
Pakistan’s overall exports of meat and its products fell more than 20pc year-on-year to 61,516 tonnes in 2016-17, fetching $221m, a decline of about 18pc.
Officials say exports volume decreased mainly due to lower shipments of frozen meat to the GCC region, where halal frozen meat suppliers from the United States, Australia and New Zealand have penetrated.
Statistically, not only Pakistan’s merchandise exports to Qatar have remained intact so far, but service exports have also not suffered so far.
In June, Pakistan’s service exports to Qatar jumped nearly 28pc year-on-year to cross $6m. But here’s the catch: the increase occurred chiefly under one head, namely “government goods and services not included elsewhere”.However, the rise did help offset the impact of a big fall in another major head, i.e. transport.
“This means our export earnings from Qatar through air and sea fares charged on people or goods as well as postal, courier, pipeline and port services were lower [in June],” a central banker explained to this writer.
Central bankers and TDAP officials say that even this decline cannot be automatically linked to the crisis in the GCC region and must be watched for a few more months to ascertain its reasons.
Published in Dawn, The Business and Finance Weekly, August 28th, 2017