KARACHI, Oct 10: The country’s external trade during last one month (Sept 11 to Oct 10) remained in disarray, as exporters and importers continued to face a number of problems arising one after another.
The $20 billion external trade has been burdened in a short span of 30 days with such additional costs coming in the shape of ‘war risk premium’ on ships operating in the region, hike in freight charges, rise in insurance cost for import/export consignments and weakening of the dollar against the rupee.
Against these negative developments, there was only one concession from State Bank of Pakistan in the form of a one per cent cut in the export finance rate to 12 per cent.
The exporters are now paying about $500 more (from Oct 1) per container on account of war risk premium: $185; freight rate hike: $150 and cargo insurance (cif): $125 for export shipment and along with this, have to bear the sudden free fall of dollar against the rupee.
Exporters fear that the country will end up losing around $2.5 billion in export trade alone as western buyers have heavily slashed down the new orders.
The vice chairman Pakistan Knitwear and Sweaters Exporters Association (Paksea) Anis Marfani told Dawn that presently exporters were paying Rs119 per kg for transportation of export goods to Europe as against Rs67 to Rs70 per kg before Sept 11.
He said many western buyers have almost stopped placing fresh orders because of negative projection of Pakistan by world media.
Responding to a question, he said, “it is true that no order has been cancelled by any foreign buyer during last 30 days, but it is equally a reality that the foreign buyers have stopped placing fresh orders.”
The chairman, Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea) Masood Naqi said that if all goes well, country’s exports may go well upto year-end but for sure they will register a steep fall of 50 per cent by the close of the fiscal year.
He said the industry was fulfilling those orders, which had been placed by foreign buyers about six to 12 months back and were seeking their early shipment to catch with the Christmas and new year events.
The textile exports comprise around 65 per cent of $9 billion total exports and Masood Naqi feared that because of steep fall in new orders, there would be loss of around $2.5 to $3 billion in export earnings.
He was highly critical about the on-going negative projection of the country in the western media, and said that the government should immediately take up this issue with foreign diplomats placed in Islamabad and also activate missions abroad.
He suggested that the government also take the services of media consultants and hire lobbyist to counter the negative propaganda. It is time that country’s image should be improved at any cost, he said.
The chairman, Pakistan Bedwear Exporters Association (PBEA), Shabir Ahmed said that the government, while negotiating with the US, should have a single point agenda seeking write-off of debts. He said all bilateral debts could be easily written off.
He said that at this juncture if the government releases funds belonging to export trade on account of sales tax claims and duty drawback, it would give some relief to exporters but it seems that even such matters, which are of internal nature, are being delayed.
During this period, he said, major airlines have also cancelled their operation from Pakistan, which has directly damaged exports, as all foreign airlines stopped their cargo service.
Shabir said that negative projection of the country had stopped foreign buyers from coming to Pakistan, and those who had been working with some projects as consultants or technicians had left giving panic alarms around the world.
Similarly, problems are being faced by import trade where costs had gone up and suppliers were reluctant to even accept LCs on sight which was almost a cash payment in advance against the shipment.
The chairman, Pakistan Commodity Traders Association Raees Tarmohammad, said at present the stocks of essential goods were sufficient to meet the country’s demand. If the war prolongs, he added, there could be some shortage.
However, he said as the industry was also not operating at full capacity, and the supply of imported raw material was presently sufficient to meet the near future demand of the industry.