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Nov 08, 1999

  1. International
  2. Finance
  3. Industry
  4. Policy
  5. Trade
  6. Gulf

Increase in POL prices inevitable: Dr Gulfraz

Federal Secretary for Petroleum Dr. Gulfraz Ahmad has said that any adjustment in prices of petroleum products would have minimum impact on the common man.

He was talking to newsmen after inauguration of PSO operated new vision station here, Thursday.

The Petroleum Secretary said that upward movement in petroleum prices was inevitable following the surging prices in the international market.

TCP barred from cotton purchases

Federal government has announced that cotton prices will, hereafter, be governed by free market rules and from Thursday (today), and Trading Corporation of Pakistan (TCP) will have no role in purchasing crop from ginners as earlier decided on September 29 by the previous government.

Military government has also announced to do away with three (3 percent) guarantee tax on cotton exporters with immediate effect to promote crop export and stabilise the market prices.

These major announcements were made by the secretary food, agriculture and livestock Dr Zafar Altaf and secretary commerce Naveed Ahsan in a joint press conference here on Wednesday in the evening.

They disclosed that to revive cotton activity in the market, the CBR authorities have also been directed to pay outstanding dues amounting to Rs 5.5 billion of solvent extractors units owners in connection with sales tax on cotton seed, immediately.

Exporters demand EU quota

The exporters to European Union (EU) countries have not been informed about the fate of remaining quota out of 3000 tonnes annually given to them in the month of September under Pak-EU Bilateral Textile Agreement.

"We had been asked by the Quota Supervisory Council (QSC) through a public notice of Oct 23 to apply for a quantity of 875mt to be given for category-9 and for 800mt for category 20," a leading exporter said.

Although the QSC in its earlier public notice of Sept 30, informed the exporters that formal request for the grant of 3000 tonnes had been placed before the EU authorities. But till today the response from the EU is not known to the exporters.

LCs for pulses drop on cash margin

The number of letters of credit (LCs) being opened for the import of pulses has plunged to only 25 per cent after the 35 per cent cash margin by the State Bank.

"Importers are now very much reluctant to open LCs as the new measure increases the cost of import," General Secretary, Karachi Wholesalers Grocers Group (KWGG), Anis Majeed told.

The Group has sent a letter to the State Bank Governor on November 1,1999, urging him to exempt pulses from the cash margin requirement.

Oil imports seen down on local supply

Rising cheaper domestic vegetable oil supplies and uncertainty about world prices could cut into Pakistan's imports for the next several weeks, dealers said.

'Increased supply of cotton seed oil from an expected bumper cotton crop has slashed demand for imports,' said a dealer at a major vegoil brokerage house.

Pakistani mills blend cotton seed oil with other veg. oils to make cooking oil.

Dealers said uncertainty about world prices has also kept importers cautious.

Pakistan likely to export 3m tons rice during 1999-2000

Pakistan plans to export 3m tons of rice due to expected local bumper crop during '99-2000. A harvest of 4.9m tons of rice in '99-2000 is also expected against 4.7m tons in,'98-99.

Official sources disclosed this during a high level meeting held in the ministry of food, agriculture and livestock the other day to review rice crop for the year '99-2000.

Officials added after meeting its local requirement of 2.2m tons, it has been estimated that there would be a surplus stock of 3m tons of rice which can be exported to Far Eastern, Gulf and European countries.

The position of carry over stock has been calculated at 0.7m tons.

The meeting was attended by rice exporters, mills owners, officials of the ministry of agriculture, ministry of commerce and PASSCO to review fresh rice situation and procurement arrangements in the country.

Sources said participants were told by Inayat Ullah Khan, sugarcane/rice commissioner that rice production has increased in Punjab by 4%. However, it went down in Sindh by 0.5% as against last year. The main reason behind short rice crop in Sindh has been attributed to continuous shortage of water in the province in the recent months.

Similarly, sources said, it was disclosed that area under rice also registered an increase of 0.3% during '99-2000.

The production of fine rice is expected to increase by 12% during the coming harvesting season. 'And it is expected that the country will harvest 1.8m tons of fine rice against 1.5m tons last year', sources quoted Inayat as telling the participants of the meeting.

Cash margin on import of machinery goes

Importers are no more required to deposit 20 per cent cash with the banks before opening letters of credit for import of machinery and their spare parts.

The State Bank told all banks on Saturday it had withdrawn the 20 per cent cash margin from import LCs of all kinds of machinery and their spare parts. It said the withdrawal would be effective from Nov 1. On Wednesday, the State Bank had withdrawn the 10 per cent cash margin from import LCs of industrial raw materials.

The SBP circular (BPRD no 38) that announced the withdrawal of cash margin on import of machinery said the decision had been taken "with a view to encouraging capital formation and reviving the economy."

The SBP had imposed 10-35 per cent cash margins on import LCs on Oct 14 to contain imports and check over-invoicing by the importers. The margins were imposed also to keep importers from getting panicky in the wake of the Oct 12 military take-over.