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Sep 24 - 30, 2001

Lint demand increases in world market

The export competitiveness of Pakistani lint cotton on the world markets has significantly increased since the disruption of supplies from the US after the last Tuesday's attack on the World Trade Center and the Pentagon.

"A spate of enquiries from foreign buyers are pouring in each day," claims a private sector exporter and added: "the disruption of supplies from the US has heated up the global markets."

After having fallen to a seasonal low of Rs1,750 per maund, the local prices have risen by Rs100 since Tuesday, but "we still command a fair profit margin," he said.

The world cotton prices have declined to 15-year low at 37 cents per lb on reports of 3.5 per cent or five million bales increase in production at 96.4 million bales but the global consumption is estimated to have shown a marginal rise of one per cent or 90.2 million bales. But the attacks on the US business houses have altogether changed the world cotton outlook, and Pakistan, just on the threshold of harvesting another bumper crop, could well be the chief beneficiary.

The International Cotton Advisory Committee in its recent report estimates a production glut and a sizeable exportable surplus capable of keeping world prices depressed. However, the post-US attacks scenario tells that users of Pakistani lint are in a bit hurry, and wants to cover their forward positions fearing an imminent price flare- up, exporters said.

According to US crop estimation of 20 million bales against expected 7.72 million consumption would lead to large quantitative exportable surplus.

Realizing this, cotton analysts said, the US government was preparing long-term policies to promote their cotton in large cotton consuming countries like India and Pakistan, which had the potential to increase their consumption following moves to relocate US and European spinning mills in South Asian countries.

Wheat export plan on track

Pakistan's ambitious plans to export up to two million tons of wheat are on track despite political tension running high at home, as Middle East buyers are stepping up enquiries, a Pakistani government official said.

Although Asian grain traders feel Pakistan's wheat exports could suffer a setback if the political situation in the Middle East deteriorates, government officials said Pakistan was considering another export tender soon.

Shaukat Usman, joint secretary in Pakistan's Ministry of Food, Agriculture and Livestock, said the government was contemplating another tender due to buoyant demand from Yemen, United Arab Emirates and Iraq.

Several states delaying shipments

Several countries are delaying shipments to Pakistan as tension grips Islamabad amidst fears of a war between the US and Afghanistan over the September 11 terrorist attacks on New York and Washington.

"Many suppliers in Malaysia, Indonesia, Sri Lanka, Singapore and Dubai are delaying shipments of our imports," said president of the All-Pakistan Commodity Traders Association Raees Ashraf Tarmohammad. "They are delaying shipments as they fear breakout of a war here," he told.

Tension has gripped Pakistan after Islamabad agreed to provide its airspace to the US for launching an attack on the hideout of Osama bin Laden whom the US has described as the main suspect in the terrorist attacks on the World Trade Center and Pentagon. What has intensified this tension is that Taliban have threatened of retaliating against any country providing a base to the US to launch an attack on Afghanistan.

Pakistan seeks more palm oil

Buyers from Pakistan are making fresh enquiries to buy more palm oil from Malaysia and Indonesia due to fears of a possible US retaliation for last week's attacks on the United States, traders said on Thursday.

"Local prices have shot up in Pakistan because there's a shortage in edible oil. They need to buy palm oil now just in case a war breaks out," said one Singapore-based trader. "We already booked to ship 18,000 tons of oil to Pakistan. We booked some more vessels," he said.

Exporters face liquidity problems

Hundreds of cases of sales tax refund and duty drawbacks have piled up in the local Sales Tax Collectorate creating liquidity problems for the exporters.

Due to ill-conceived policies of the Central Board of Revenue high-ups, about 90 per cent cases of sales tax refund and duty drawbacks had been "stopped" by the collectorate for want of funds in this behalf.

Exporters were being asked by the sub-ordinate staff of the collectorate that their files have been sent for verification of shipping bills and invoices and the payment would be made immediately after receiving instructions from the high-ups.

Afghan transit trade suspended

Suspending operations under the Afghan Transit Trade (ATT), the Torkham-based authorities of the political administration, Khyber Agency, on Monday stopped 29 trucks carrying goods under ATT from crossing over to Afghanistan, senior government functionaries told.

"When the border is sealed, how can goods in transit be allowed passage to Afghanistan," political agent, Khyber Agency, Fida Gul Wazir said when contacted.

Foreign buyers stop placing orders

Negative effects had started emerging on external trade as foreign buyers had either stopped placing new orders or drastically reduced quantum, fearing non-delivery of goods in case of outbreak of war in the region, exporters said on Monday.

"The government is pre-occupied with taking measures in the aftermath of last Tuesday's catastrophic terrorist attack in New York and Washington, but external trade of the country is suffering badly," a leading exporter requesting anonymity told.