MANGO EXPORTS EARNED PAKISTAN $94MN IN 2 YEARS
Mango exports earned Pakistan $94.059 million in foreign exchange during 2014-16, officials in the Commerce Division said on Tuesday.
Quoting figures compiled by the Pakistan Bureau of Statistics (PBS), they said that 129,423 tons of mangoes were exported to various countries in the last two years. Figures for the recently-concluded fiscal year were not discussed.
During 2014-15, Pakistan exported 65,311 tons worth $45.672 million while in 2015-16,64,112 tons were exported valued at $48.387 million.
Most importing countries require vapour heat treatment and irradiation before accepting exports, the officials said, adding that the government has taken steps to improve quality including establishing of standard operating procedures (SOPs) for growers for effective farming and cultivation.
They said that 313 SOP-compliant mango orchards were registered for mango exports to the United States, Australia, Korea, European Union (EU) member countries and other markets after technical audit for quality.
Moreover, the officials said the government provided SOPs to fruit and vegetable exporters and established an irradiation facility and 34 Hot Water Treatment (HWT) and three Vapour Heat Treatment (VHT) facilities to ensure quality compliance by exporters. The officials said the government has also established 34 ripening chambers along with banning the use of calcium carbide.
Packaging in wooden crates has also been banned to avoid damage incurred due to nails, rough surface of the wood and the latter’s potential for harbouring pests and insects.
The government has facilitated sea-freighted export of fresh mangoes to lower transportation costs and makes the exported mangoes more competitive in the European market.
Cold storage facilities have been developed in Punjab and underdevelopment in Sindh will help to remove field heat (pre-shipment) to carry the shipment to its destinations without any qualityloss/deterioration, they said.
ADB: PAKISTAN’S TWIN DEFICITS MAY BE HARD TO BEAR
The Asian Development Bank (ADB) has said that Pakistan’s twin deficits – that are historically root causes of bringing an economy down – would further worsen in the current fiscal year, projecting that the current account deficit may widen to as much as $14.5 billion.
The projected deficit is $5.5 billion more than the finance ministry’s estimates for 2017-18. It is also $2.5 billion more than the record deficit of $12.1 billion booked in the last fiscal year 2016-17.
In an update of its flagship annual publication, Asian Development Outlook 2017, the ADB also termed the Rs1.4 trillion budget deficit target “ambitious”, suggesting that it will be difficult to achieve in an uncertain political environment. Pakistan will also miss its 6% economic growth target that according to the ADB will remain at 5.5%.
The multilateral agency said that due to worsening current account deficit Pakistan’s choice is now limited to either “rapidly depreciate the currency” or increase foreign borrowings to finance the external gap.
However, Finance Minister Ishaq Dar’s preferred choice has so far remained ‘reckless’ borrowings that resulted in $83-billion external debt and liabilities by June this year.
“The authorities may need to consider rapid currency depreciation at some point to rein in import growth, or increase foreign borrowing to finance the external gap, to prevent an undue weakening of foreign exchange reserves,” suggested the Manila-based lender.
The Pakistan rupee remained largely stable in FY2017 and was valued at Rs105.4 to a dollar in July. In recent years, the currency has been on a rising trend in real effective exchange terms, eroding Pakistani competitiveness with appreciation by 3.6% in FY2017 on a widening inflation differential, said the lender.
The ADB said that the current account deficit would touch 4.2% of GDP due to rising imports, declining remittances, and stagnant exports. It said that a key challenge will be to finance Pakistan’s burgeoning trade deficit as remittance inflows continue to fall.
Due to its twin deficits – the current account and budget – Pakistan has obtained over one and half dozen bailout packages from the International Monetary Fund to correct macroeconomic imbalances.
While highlighting the worst performance of the export sector, the ADB said that the share of exports in GDP nearly halved from 13% in 2006 to a dismal 7.1% by the end of fiscal year 2016-17. Exports fell annually by 2.5% on average from FY2013 to FY2017 for lack of competitiveness or conditions for modernising investment, leaving persistently low value addition to fetch low unit prices, said the lender.
In comparison, imports are expected to continue to increase as growth spurs domestic demand that domestic production cannot meet, said the ADB. The continued large trade and current account deficits were covered by drawing on foreign exchange reserves, which fell by $1.5 billion to $14.6 billion at the end of August. The reserves have further fallen down to $14.2 billion.
The ADB warned that over the medium term, increasing government and CPEC-related repayment obligations highlight the need to carefully manage external debt, the balance of payments, and their financing requirements while instituting macroeconomic and structural policies to support economic stability and make Pakistan more competitive.
REGULATIONS NEEDED TO BOOST ADVANCED AGRICULTURE PRODUCTIVITY
Pakistan needs an independent, science-based, transparent and predictable regulatory regime that would enable farmers to fully reap benefits of modern and advanced agricultural technologies for sustainable productivity in the country.
Though the establishment of more than 30 biotechnology research institutions is a testament to the government’s commitment towards promoting biotech crop solutions, we still need a regulatory environment where companies applying for registration of their latest products know the timeframe for approval or their product or vice versa.
There is also a need to distinguish between the applicants and regulators as in Pakistan’s case some applicants also have the role of regulators, which may create issues for other companies.
These views were observed by CropLife Asia Executive Director Dr Siang Hee TAN, while talking on Tuesday. Siang was of the view that growing population, climate change, scarcity of water and changing lifestyles continue to pose challenges to our food security. In order to address this emergent challenge, we need to promote sustainable means to grow food and embrace technological innovations that enable the same.
Siang is currently visiting Pakistan on an invitation from Pakistan Chapter of CropLife -CropLife Asia is a global initiative to ensure sustainability of agriculture.
Praising the Pakistan government’s vision and policy-position on technology adoption, especially relating to bio-technology, Siang urged the regulators to develop better synergies with their international counterparts and benefit from knowledge-sharing through data-transportability arrangements.
“The best-practices being adopted across the Asia region include; allocation of adequate resources for staffing and capacity-building of regulatory bodies, along with the deployment of modern agriculture technologies and progressive-farming methods.
“Rules and processes are being made more conducive to agricultural growth, through close consultation with the experts of this sector,” he remarked.
IAF TO OPEN OFFICE IN PAKISTAN
The International Apparel Federation (IAF) is going to open its first regional office at the Pakistan Readymade Garments Manufacturers and Exporters Assoication (PRGMEA) House in Sialkot where PRGMEA will also ink an MoU with the Dutch National Fashion & Textile Association Netherlands (MODINT) for the first time in Asia.
The move seems a timely step considering Pakistan’s rapidly declining textile sector and its dwindling exports.
PRGMEA Central Chairman Ijaz Khokhar said that IAF President Han Bekke and Secretary General Matthijs Crietee will visit Pakistan to inaugurate the regional office and the newly-constructed PRGMEA office in Sialkot.
He said that on the occasion the MODINT, which is the largest importers association of home textile, garments and textile, will sign a MoU aimed at enhancing trade of readymade garments between Pakistan and the Netherlands. Khokhar said that the establishment of IAF office in Pakistan will open new avenues for the textile industry to collaborate with international buyers and leading brands.
“Besides granting domestic membership to garment manufacturers, this office will also help in arranging B2B meetings among importers and exporters of apparel sector across the world,” he said.
RISING EXPORTS LEGISLATORS STRESS MODERN TECHNIQUES
The Senate Standing Committee on Commerce and Textile stressed the need for modernisation of trade mechanism and introduction of best international practices for enhancing the country’s exports.
The committee meeting, held on Tuesday, was chaired by Senator Syed Shibli Faraz. The chairman urged the ministry to take steps to bring new trends in industries and exports after the emergence of fourth industrial revolution.
The committee also asked for a briefing on the National Tariff Commission (NTC) in the next meeting to review the performance of the institution. “Visionary policies are needed for increasing the country’s exports in coming years,” said Faraz. “We need to observe the situation for ensuring long-term policies in this regard,” he added
MARDAN TO SWABI ROAD FIRST PHASE TO BEGIN WITH ADB’S ASSIST
The Standing Committee on Communications informed on Tuesday that with the assistance of the Asian Development Bank (ADB) the first phase of Mardan to Swabi road will be started soon.
The meeting was presided by Standing Committee Chairman Muzammil Qureshi. The Ministry of Communication stated that most of its projects were in Balochistan. The committee was informed that residents of Khuzdar had to travel via Karachi for Sukkur but now Khuzdar-Sukkur direct road will be inaugurated very soon. M-8 had already been completed and now it takes six hours to travel over 650 km.
The meeting was also informed that the Kuchlak bypass construction has started. The committee directed for the completion of Chakdara-Kalam road on a priority basis because residents of the area were facing problems during travel.
CREDIT SUISSE-LED CONSORTIUM TO OFFLOAD 18.39PC STAKE IN MARI PETROLEUM
The government may hire a Credit Suisse-led consortium to offload 18.39% stake in Mari Petroleum Company Limited amid its desperation to raise about Rs30 billion for budget financing as its books come under stress.
In response to the Privatisation Commission’s request for Expression of Interests (EOI), only the Credit Suisse-led consortium submitted technical and financial bids till the deadline that expired on Monday, according to Privatisation Commission’s officials. The other members of the consortium are Arib Habib Limited and Elixir Securities. The EOI had been given to hire a party as financial advisor.
This has limited the government’s option to either engage Credit Suisse as financial advisor for the transaction, subject to successful vetting of its bid, or re-advertise the EOI. At Monday’s closing, Mari’s share price was Rs1,548.4 per share, with the government’s 20.2 million or 18.39% valued at Rs31.4 billion or $299 million.
The officials said that due to the successful track record of Credit Suisse, chances are that the government may decide to hire the services of the single bidder. Credit Suisse was also the financial advisor for the two successful capital market transactions of Habib Bank Limited and United Bank Limited.
They said that it was the right time to conclude the transaction due to better financial results of MPCL. During the previous fiscal year, the company earned after-tax profit of Rs9.13 billion – up 50.98% over the previous year. The main reason behind the increase in profit was reduction in expenses on account of Gas Development Surcharges. The company’s gross sales during the last fiscal year amounted to Rs96.8 billion – higher by 1.87% over the previous year.
However, the consortium’s technical and financial bids will be first scrutinised by an evaluation committee that will submit its report to the Board of the Privatisation Commission. The final decision to accept the single-party bid will be taken by the Board.
Due to a single bid, the government will have to take extra care about the fees that it will pay to the financial advisors. The government has decided to divest its 18.3% stake in the stock market after two other joint venture partners refused to buy these shares at a price approved by the Cabinet Committee on Privatisation (CCoP). The CCOP had approved Rs1,297 per share transfer price, which the joint venture partners did not accept.
The Fauji Foundation that controls 40% and Oil and Gas Development Company (OGDC) having 20% shares exercised their first right of refusal. Now, the Rs1,297 per share price is the minimum benchmark for the Privatisation Commission.