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Dec 13, 1999

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

$729m trade imbalance during July-Nov

Pakistan suffered a trade imbalance of $729m during the first five months of '99-2000, showing a massive increase of 36% over the corresponding period of last year, according to a Commerce Ministry source.

This is attributable to a sharp increase in imports, 11.4% during this period. This nullified 7.9% rise in exports which totalled $3.3bn during the period, as against the import bill of over $4.0bn. The same period of last year had registered an import bill of $3.61bn. During the period July-Nov, '98, it will be recalled, the trade gap was $536m.

The import bill had gone up due to rise in international price of petroleum products, the source stated.

In rupee terms also, the exports have registered persistent stridency. As against Rsl533.6bn during the first five months of last year, the export receipts in local currency went up to Rsl722.1bn, in a period of partial control on exchange rate.

During the month of November, the country exported merchandise worth $714m indicating an impressive increase of 14.1% over the corresponding month of last year. This performance is significantly better even than that of October '99 when the exports totalled $676m.

The same source was confident that the exports would continue to show higher growth figures during the remaining months of the current financial year. By next June, exports might cross the $9b figure, depending on the growth pattern registered since July '99. In this connection, he pointed out that upto September, the exports had grown at the rate of 5.3%. In October, these went up by 6.3%. In November, the growth rate was still higher — about 8%.

Low global demand for rice

The slide in global demand has put a lid on Pakistan's rice exports and dealers said on Thursday the trend could prolong a bearish trend in prices. I fear that the bearish trend will continue because there are no fresh orders, said a Karachi-based rice exporter of IRRI variety. He said only two ships have arrived at the Karachi port to carry shipments of 20,000 tons and 7,000 tons to Africa. But these were all delayed orders and nothing else is in sight, he said.

 Exports suffer due to euro depreciation

Exports to Europeam Union countries have suffered a sharp decline of 12 per cent during the year because of progressive depreciation of Euro against the rupee.

The appreciation in the value of Pakistani rupee which made exports more expensive was said to have been caused by the relative weakness of the Euro against US dollar.

For the first time since Euro was launched in January 1999, it was quoted at par with US dollar after having a premium of Rs 5 to 7. In sympathy almost all the home currencies of EU member states have weakened against US dollar. This has made Pakistan rupee artificially stronger because of being directly linked to the dollar.

The EU states are the biggest trading parnters of Pakistan having annual trade volume of around one billion dollars. Due to heavy fluctuation between Euro and US dollar most of the EU states prefer to quote their rates in home currencies.

Exporters got rebate

Exporters of textile, sugar and leather goods received a huge amount of rebate to the tune of Rs 8.64 billion out of Rs 14.87 billion total rebate given to export industry during 1998-99.

Details revealed that the exporters of textile, sugar and leather made-ups outclassed the exporters of leather, sports goods, surgical goods, carpets and biscuits in obtaining rebate during the last fiscal.

The exporters of textile products got Rs 5817.90 million rebates while sugar and leather made-ups exporters received Rs 1483.80 million and Rs 1348.80 million as rebate, respectively, in 1998-99.

Iranian petrol finds markets

The smuggled Iranian petrol whose sales previously remained confined to the border areas of Balochistan, is now available in Sindh and parts of southern Punjab.

Due to higher incidence of smuggling of contraband POL products including petrol and diesel to Sindh and southern Punjab the anti-smuggling agencies have to resort to open auction for the disposal of large quantities seized by them.

The Iranian products are being marketed at half the official rates of the imported POL products. The rate of petrol for the smuggled products ranges between Rs13-15 per litre as against the official rate of Rs26.25, and diesel between Rs5-6 per litre against Rs10.80.

Sources said, the availability of smuggled petrol and diesel in larger quantities in Sindh and Punjab has put the concerned agencies on high alert.

Readymade garment sector shows good growth

Some 250 textile firms entered into readymade garments export business during 1999 in view of its potential and prospect of more foreign exchange income.

Sources at the Pakistan Readymade Garments Manufacturers Association (Prgmea) told that they had received 250 applications for membership from new and existing textile units which wanted to export readymade garments.

It may be pointed out that no firm can enter into export business without becoming a member of the textile association concerned. Prgmea provides a wide range of services to its members right from transfer of textile quota to the issuance of export visa for shipment. It helps members in resolving all problems related to exports vis-a-vis Customs; Sales Tax, Export Re-finance and Ports and Quota Supervisory Council.