KARACHI, June 13: High import duty on rice by Iranian government is encouraging smuggling and a large number of trucks loaded with ‘Super Kernal’ rice daily cross Pak-Iran boarder to avoid 40pc duty.

This is not only causing huge revenue loss but also rapidly eroding official trade of rice between the two countries.

Iranian importers are urging both the countries to enforce stick checking at Pak-Iran border to discourage smuggling which has almost destroyed official trade of rice.

“Huge quantity of smuggled rice is presently flooding the Iranian market and is being sold at much lower price than the duty-paid imported rice,” complained Mirza Mohammad Ali Khorasani, a leading Iranian rice importer, in a letter to President of Union of Small and Medium Enterprises (Unisame) Zulfikar Thaver.

Mr Khorasani said that Pakistani Super Kernal rice was being sold at $675 per ton c&f Bandar Abbas and importers had to pay duty of $280 per ton and after adding other incidental charges such as inland octroi etc., the total landed cost came to around $980 per ton.

Against this, he said, smuggled rice was being sold at $770 as it reached the market without paying duties and other levies. As a result of this situation import of rice through official channel was diminishing as no importer could afford losses for indefinite period, he added.

Pakistani Super Kernal rice was in high demand in Iranian market but presently much of its requirement was being met through smuggling, causing huge revenue loss to both the countries, he said.

Besides, he said, there was a big scope for increasing foodstuff trade between the two countries however this could not be possible without reducing import duties by Iranian government, which presently stand as high as 40pc.

Another problem confronting importer and exporters of both the countries was the absence of any proper banking facilities which were needed for promoting official trade between nations, he further pointed out. Presently, a representative office of Habib Bank was working in Tehran only.