KARACHI, March 7: Amid gathering war clouds over Iraq, the exporters are finding it difficult to assure their buyers of timely and uninterrupted deliveries which have to be booked at this time of the year to meet autumn season requirement in the West, exporters said.
Foreign buyers are skeptical about the situation and feel that if war breaks out, both Pakistan and Turkey would fall under war zone which would put their orders at halt.
The shipping companies have already raised their freight as well as bunker charges which, exporters consider, is a prelude to Iraq war.
The rapidly rising POL prices in the world market has also sent shock waves, thereby forcing world traders to adopt a cautious and highly calculated moves to avoid huge losses in case hostilities break out, leading exporter said.
It is also being feared by foreign buyers that the war would bring down prices of primary and raw materials because of low demand of finished goods at retail end of the world markets. The consumers will quickly change their buying pattern and will only spend on food items and essential goods.
“Undoubtedly there is a drastic fall in orders from foreign buyers of leather garments who feel that Iraq war will once again push Pakistan into war zone,” Fawad Ijaz Khan, chairman Pakistan Leather Garments Manufacturers and Exporters Association (PLGMEA) said.
He said only last night his foreign buyer has reluctantly placed order for only 2000 pieces of leather jackets, which is only 10 per cent of 20,000 to 25,000 pieces what he had been buying over the years.
Fawad Ijaz Khan said the first two months of an year is a peak season for leather garment manufacturers who book orders from foreign buyers to meet the autumn season requirement which starts from September in the West.
“Normally our production line at this time of the year works at full scale as we have to make shipments by end-June in order to ensure that products are available by September at retailer’s end. However, this year we are still working much below our capacity mainly because all the stakeholders, from wholesalers to retailers, have adopted a wait-and-see attitude on Iraq war,” he said.
On the other hand, he said leather garment manufacturers have stocked huge quantities of raw material in anticipation of normal buying response from world traders. But so far, Fawad said, buying and placing of orders from foreign buyers is very slow and it is being generally feared that the leather industry will witness another bad year.
Zubair Parekh, chairman, Pakistan Readymade Garment Manufacturers and Exporters Association (Prgmea), said export trade have started feeling the pinch of uncertainty because of looming clouds of Iraq war.
He said foreign shipping companies have already raised freight as well as bunker charges which have added a burden to external trade. Similarly, rapid rise in POL prices in the world and domestic markets have already enhanced input cost.
Former chairman Pakistan Bedwear Exporters Association (PBEA) Shabir Ahmed said on the fear of Iraq war his buyer also went to India to place order. He said presently world traders want to ensure the war should not withhold or get stuck their deliveries at any stage.
Shabir said the current uncertainty is ‘killing’ our trade and business community the world over is reluctant to take any risk by over spreading their activities.
He urged the government to do its home work ahead of war and should give sovereign guarantee to avoid War Risk Premium (WRP) from foreign shipping companies. In the Afghan war, he said these companies unjustifiably imposed the WRP which squeezed the national exchequer in millions of dollars.