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Nov 13 - 19, 2000

Pakistan exports reach $2.9bn during July-Oct

Pakistan's merchandise exports totalled $2.97 billion during the period July-October 2000, showing an increase of 13.36 per cent over the corresponding period of previous year.

The imports also soared by 14.95 per cent to $3.69 billion during the same period, cancelling the positive effect of impressive rise in exports on the balance of payments situation, according to the aggregate trade figures made available by the ministry of commerce.

Consequently, the trade deficit rose to $720 million in the first four months of 2000-01. This is 22 per cent more than that in the corresponding period of previous year. The government had announced that the trade deficit during 2000-01 would be reduced to $800 million.

The target for exports set out in the trade policy for the current fiscal is $10 billion. The statistics showed that the country has achieved only 29.7 per cent of that target. This means that the country has to cover over 70 per cent of the target in the remaining 66 per cent of the year.

As a result of huge jump in imports during the period under review, the proportion covered by exports also registered a sharp decrease. Whereas in July-October 1999, exports had accounted for 81.62 per cent, their ratio to imports dropped to 80.49 per cent this year.

Merchandise exports during the month of October 2000, amounted to $744 million, which is 9.9 per cent more than the figure for October 1999. It also showed an increase of 6.29 per cent over the exports during September 2000.

Further analysis of the foreign trade statistics showed that in the single month of October 2000, the export-import gap at $216 million was double than that in the corresponding month of last year.

Condition of 50% export may go

The federal government is considering removing the condition of exporting 50 per cent of products by industries exempted from payment of import duty on plant and machinery in the budget 2000-2001.

The export industry is now demanding that the condition of 50 per cent export be waived for allowing duty-free import of machinery as, according to them, the condition of export market is not favourable and they have failed to export the required volume of their products.

The export industry had requested before the budget for allowing duty-free import of machinery, listed as not-locally-made (NLM). They had committed to ensure exportable surplus to the extent of 50 per cent of their total production.

Rise in exports despite sanctions

Sanctions and lower capital inflows over the years have hit imports from developed countries and turned Pakistan's traditional trade deficit with donor states into substantial surpluses, specially with the USA emerging by far the largest export market.

Despite the shrinking share of industrialized world in country's foreign trade, exports to the USA have soared to nearly 22 per cent of total sale of merchandize, exceeding imports by well over $1 billion on an annual basis.

In 1998-99, export earnings from USA touched $1,818 million against imports of $766 million, down from $1135 million a year earlier, resulting in favourable trade balance of $1,052 million. Simultaneously, the share of G-8 members in overall imports has declined from 34.2 per cent in 1997-98 to 30.5 per cent in 1998-99, a fall from $3.4 billion to under $3 billion. Pakistan's export to this club of industrial giants has remained stagnant at around $3.9 billion.

Reduction in duty to avert penalty

The government has asked the Central Board of Revenue to reduce import duty on 14 US textile items into Pakistan by 10pc to avert a penalty of $300 million.

The penalty threat is posed by the American Textile Manufacturers' Institute (ATMI), through an application filed with the US Department of Commerce against Islamabad's refusal to reduce the import duty rate on these items under the Generalised System of Preferences (GSP) Scheme.

Trade moot in Toronto on cards

Plans for holding trade conference and single country exhibition in Toronto are on top of the list of recommendations, recently made by the Canada-based Pakistani mission which is endeavouring to boost Islamabad's exports to North America.

The recommendations, which were finalized this week after a series of meetings held between Pakistani High Commissioner to Canada Tariq Altaf and local industrialists, traders and businessmen, have been sent to all concerned departments in Islamabad, including the Export Promotion Bureau (EPB).

Forex incentives for exporters

The government has announced that in future there would be no restrictions on quantities, and evidence on foreign exchange paid by the persons exporting goods as accompanied baggage, on travelling abroad.

The announcement came in line with the Export Policy Order-2000, with instructions to relevant customs authorities. Export of items listed as "banned" would, however, not be allowed as accompanied baggage.

Urea import target up

The government has enhanced its urea fertilizer import target for the rabi-2000 from 100,000 tons to 150,000 tons after the Sui gas company refused to supply additional gas to the local fertilizer plants during winter.

Pakistan, which was exporting urea till last month due to surplus production, is now itself facing shortage as two local fertilizer units NFC and FFC in a clear violation of the Economic Coordination Committee (ECC) decision, exported 135,000 tons of fertilizer against the approved quantity of 100,000 tons till September.

Banks cut LC margin

Banks on Monday slashed the cash margin from 25 to 15 per cent on all imports but did not expand the list of the items exempted from the margin.