KARACHI, Aug 1: The importers who have already entered into a number of import contracts after opening L/Cs are eagerly waiting for the issuance of SRO under which the government is expected to withdraw withholding tax and customs duty on import of wheat flour.

“Though the ministry of finance has already directed the CBR to issue an SRO exempting wheat flour import from withholding tax and customs duty, so far the bureau has failed to issue the same,” a Karachi-based importer lamented.

A number of importers have already entered into conditional import contracts with Dubai-based dealers of wheat flour. They are waiting for the SRO which will ensure withdrawal of six per cent withholding tax at customs stage and 10 per cent customs duty, importers said.

The delay in withdrawal of withholding tax and customs duty will make the import of wheat flour unviable as its landing cost at the Karachi Port will exceed the existing rates in the local market.

According to market sources, a leading importer had already opened a 48-hour conditional L/C to import around 20 tons of wheat flour at a rate of $210 per ton in 10 containers from Dubai, but he was still waiting for the SRO to be issued by the CBR.

Wheat importers told Dawn that the ministry of finance in principal had agreed in a meeting with the importers to withdraw withholding tax and customs duty on the import of wheat and wheat flour, but so far the CBR had only issue an SRO for wheat and not for flour.

The market sources said that if wheat flour was imported at $210 per ton, its landing cost at Karachi would be around Rs13 per kg. However, after adding profit of importers, middlemen as well as retailers, it could be sold to end-consumers at around Rs16 per kg, they added.

The importers say the imported wheat flour will not only be better in quality and ingredients, but it will also be packed in good looking bags of four, five and 10 kg.

“Importers have also assured the government that the imported flour will be supplied to utility stores at landed price from where it can be supplied to any other source to bring down prices in the domestic market,” Raees Tarmohammad, Chairman of the Pakistan Commodity Importers Association, told Dawn.

“Once the relevant SRO is issued importers could import around 1,000 tons in a short period, but in the prevailing situation importers are reluctant to take any initiative or make commitment in the world market,” an importer said.

Meanwhile, wheat prices have started coming down in the world market. Wheat of Russian and Ukraine origin is now being quoted at $138 to $135 per ton C&F Karachi as compared to the recent prices of $145 to $155 per ton.

A similar reduction is expected in the prices of wheat flour and the importers hoped that if they succeed in booking it at $195 or $200 (C&F Karachi) it could be sold at Rs13 to Rs13.50 per kg in the local market.

In fact the imported wheat flour will be competing with ‘chakki atta’, which is normally sold at a higher price and are purchased by quality-conscious consumers. Therefore, the importers hope that the consumers will prefer the imported flour over local chakki atta.