KARACHI, Oct 5: Confusion has gripped the domestic bullion trade as the government has not notified as yet free gold import announced in trade policy 2002-03.
“Neither trade nor the general public know how to take up the bullion imports if they intend to,” a leading gold dealer in the market told Dawn adding that even Customs do not have any idea about the rules and procedures as they, too, have not been notified.
The government’s decision of allowing dealers to import gold by paying one dollar per tola as the duty had created some enthusiasm among bullion dealers. But lack of any rules and guidelines was creating hurdles in liberal gold imports, dealers said.
Customs officials, when contacted by Dawn, showed their ignorance about the issuance of any SRO but an official said there is no such notification issued as yet in this regard.
An official in the Export Promotion Bureau (EPB) also said the notification on liberalising gold imports is still awaited. In absence of any rules, Customs is bound not to clear any gold import consignments, he added.
Somehow the government’s decision of allowing free gold import has motivated the jewellers to bring their own gold instead of depending on difficult supply mechanisms.
Market sources said that in the past, large quantity of gold was smuggled into Pakistan to meet the demand, owing to highly regulated imports due to disparity in global versus local prices. The licensed importers, operating with the objective of earning profit on each consignment, imported only when the local gold prices were higher than the global ones.
“Now the situation has become different due to government’s decision, but it can only bear results when rules and regulations are notified,” a bullion dealer said.
Market sources told Dawn that some of the previous licensed gold importers have approached the customs and requested them to stop the consignment if someone tries to bring it in.
“Obviously, this is because they are the only ones in this game, neither the government nor the jewellers, who are at loss,” the sources said adding that licensed gold importers have been pressing the government since July to take back the decision of free gold import.
There are six key players and importers of gold in the Pakistani markets and prominent among them are ARY, Pardesi and Tessori that are usually import around 10,000 tola per day.
However, gold is currently being imported only by the exporters of gem and jewellery under different rules in which duty is not levied and exporters are bound to send the finished consignment abroad within 180 days under SRO 266.
According to the EPB official, 400 exporters are registered with the government but only 50 of them are engaged in active export business. Pakistan’s July-August 2002 gem and jewellery exports declined to $3.9 million from $4.2 million as compared to same period of 2001.
Meanwhile, domestic gold prices continued to remain under pressure because of US-Iraq war jitters, rising by Rs195 per 10 grams since the tension between the two countries have intensified.
Gold was selling at Rs6,030 per 10 grams ahead of Middle East tension as compared to current price of Rs6,225 per 10 grams. International gold prices, which were $319 per ounce prior to US- Iraq tension, have now touched to $322 per ounce.
In case the tension in the Middle East escalates, domestic gold prices will break the June 2002’s higher peak level of Rs 6,360 per 10 grams when global gold prices peaked to $329 per ounce owing to Middle East crisis and tension at the borders of India and Pakistan. In the last one year, gold prices have gone up by Rs760 per 10 grams.
Domestic gold prices are going up due to US-Iraq war fears otherwise it should have remained stable or slightly come down as the rupee has been enjoying an upper hand over the US dollar, thus making imports cheaper.
Besides, gold demand has not picked up any pace and the business conditions, prior to elections, have been dull. Only genuine buyers are in the markets.
As for investment purpose, gold dealers say US-Iraq tension have not made any impact on the investors’ mind to go for panic buying. They said that local investors in the markets and even general public usually pile up gold whenever India-Pakistan tension gains momentum.
