. .

Jul 10 -16, 2000

Trade gap swells to $1.725b

The fiscal year 1999-2000 ended with a trade gap of $1.725 billion, signifying an increase of 4.4 per cent over the year 1998-99.

The aggregate trade figures for the out-going financial year provided by the ministry of commerce on Thursday, however, belie somewhat the earlier apprehensions that the trade deficit might exceed two billion dollars during the year.

These apprehensions were based on the pattern of previous months when the trade gap was climbing by around $200 million per month. Instead, the trade gap went up by $117 million during the first 11 months of 1999-2000.

The trade deficit during 1998-99 was $1.65 billion.

According to these figures, the country exported merchandise worth $8.459 billion, that is 8.7% more than in 1998-99. The imports totalled $10.184 billion, up 8.0% over the previous year. In absolute terms, however, the imports outdid exports: While the exports were up by $681 million compared to 1998-99, the imports increased by $752 million.

The exports thus fell short of the target of $9 billion for the year by about 6 per cent or $541 million.

Viewed in terms of the proportion of imports covered by exports, the figures also show some improvement. While in 1998-99, the exports had paid for 82.5 per cent of imports, in the year just ended, the proportion covered by exports went up to about 83.1%.

Despite 8.7% increase in exports during the whole year, their performance during the final month of the year showed a negative trend, compared to June, 1999. During the month of June, exports totalled $766 million, down 4.4% from the corresponding month of last year. However, these show a slight increase of 1.3% over May, 2000.

The exports during the first 11 months had averaged $699.2 million.

Yarn prices up in Far East

Cotton yarn prices have risen by more than three cents (US) per kilogramme in the Far Eastern markets, notably in Hong Kong during the month of June owing to stepped up demand by end product consumers, exporters said Monday.

"It is a significant development as it came just at the heels of withdrawal of the export finance facility on cotton yarn and grey cloth and may enable spinners to cut losses on that account," said an spinner.

Cotton yarn prices for the widely used 20-single count, has been ruling around 197 cents per kg since February. They have risen to 212 cent in early June and over 212.19 cents per kg at the end of last financial year ended June 30, 2000.

Pakistan exports around 900 million kg cotton yarn each year, more than a half of which is sold in the Far Eastern markets and Hong Kong, industry sources claim.

Marketing of tobacco through TCP

Pakistan Tobacco Board (PTB) has approached Trading Corporation of Pakistan (TCP) for marketing surplus tobacco in the international market.

TCP chairman Fazlur Rehman said Wednesday the Board has intimated TCP about the surplus production of tobacco this year and that it wanted to export the product to fetch foreign exchange.

"We have asked Pakistani Commercial Offices abroad to send us the list of tobacco importing countries so that we can contact them", he said. TCP has began its exercise to evaluate the potential for the export of tobacco, he added.

Pakistan, on an average is producing more than 66.38 million kilograms of tobacco per annum of various types including flue-cured Virginia, dark air-cured and burley.

The Board has mentioned that Pakistan has potential to increase production to 91.5 million kilograms if export prospects are bright.

EPB being revamped

Export Promotion Bureau (EPB) is being restructured to create three commercial courts for adjudicating export-product quality issues, and private sector experts are being inducted to man seven specialized sections for dealing with EPB's financial and promotional aspects.

The new sections of the EPB would be: skill development council; human resources development centre; marketing; financial management; supply chain and policy/procedure and information technology sections.

The private sector auditing companies would be engaged for the financial management section, he said.

Foam prices raised

The foam prices have been enhanced by 25-30 per cent, pushing the cost of furniture on the levy of general sales tax from July 1.

Chairman Alliance of Market Association (AMA) and general secretary Karachi Furniture Dealers Group, Atiq Mir criticized the price hike by the manufacturers, terming it to be the first impact of GST.

10% hike in drug prices

Local and international pharmaceutical companies have increased prices of medicines by 10 per cent from July 1, 2000.

The pharmaceutical companies include that which have revised prices of their products include Glaxo Wellcome and Highhoon Laboratories among others.

Palm oil duty cut by Rs700 per ton

The Central Board of Revenue has notified reduction of duty on crude palm oil by Rs700 per metric ton, and has imposed 5% import duty on commercial importers of parts of electricity capacitors.

Three Customs notifications were issued on Monday, to specify duty rates of these two items and for waiving penal surcharge of 2% on goods kept at the public bonded warehouses for a period up to 30 days.

Refinance for yarn

Exporters having taken refinance facility on yarn and grey cloth from State Bank of Pakistan (SBP) up to June 30, 2000, will continue to avail this facility till the end of the year.

"All those exporters who have taken export refinance facility till June 30, will not be affected by the withdrawal of this facility as announced in the Trade Policy-2000," executive director of State Bank Mansoor Rehman told the participants of Export Cell meeting held on Thursday, sources privy to meeting disclosed.