. .

 5. TRADE  6. GULF



Oct 15 - 21, 2001

Exports up by 4.30pc in Sept: Imports decline

Pakistan's exports in September 2001 increased by 2.46 per cent to $799.6 million when compared with $780 million in August, but imports in the same month fell by 17.11 per cent to $777 million as against $938 million in August.

Even if exports of September 2001 of $799 million were compared with exports of same period of 2000, it showed an increase of 4.30 per cent. Exports in September 2000 were $766 million, says provisional figures released by the Federal Bureau of Statistics (FBS) on Tuesday.

Imports declined by 18.13 per cent in September 2001 to $777 million as compared to $950 million in the same period of 2000. "Exports have increased due to shipments of old orders," an exporter said fearing decline in October owing to slowdown in bookings by foreign buyers and delay in confirming letter of credits (LCs) after September 11 incident.

Exporters paint a gloomy picture of foreign exchange earnings in October and November in case the US intensifies attacks on Afghanistan. "The real impact of September 11 will be felt in the current month and next month," they said.

The government had already warned of a possible decline in exports by $1.5 to $2 billion in the current fiscal in view of the current situations. In July-September 2001, exports also rose by 1.77 per cent to $2.264 billion from $2.225 billion in the same period of 2000. However, imports registered a fall of 8.18 per cent to $2.507 billion in the first quarter of 2001 as compared to $2.730 billion in the corresponding period of 2000.

Product-wise comparison of exports in September 2001 with August 2001, showed that exports of rice plunged by 27.55 per cent, fruits by 37.58 per cent, crude animal material by 22 per cent, POL products by 26 per cent, sports goods by 21 per cent, leather goods by 25 per cent, surgical instruments by 33 per cent and cutlery items by 47 per cent.

NWFP import receipts up

The dutiable imports in the NWFP have registered positive growth of over 281 per cent in September to Rs2.4 billion against Rs0.63 billion during the same period last year.

The total import bill in the province, however, was Rs2.5 billion in September against Rs1.87 billion over the corresponding period last year, showing an increase of 38.88 per cent.

Similarly, the duty free imports in September decreased by 92.33 per cent to Rs0.095 billion against Rs1.24 billion over the corresponding month last year.

Official sources attributed the increase in the dutiable import items to the closure of the Afghan borders in the wake of US-led attacks on Afghanistan.

They were of the opinion that due to decline in the volume of Afghan Transit Trade (ATT), which was believed to be the main source of smuggling back into Pakistan, the volume of dutiable imports increased in the province.

External trade in disarray

The country's external trade during last one month (Sept 11 to Oct 10) remained in disarray, as exporters and importers continued to face a number of problems arising one after another.

The $20 billion external trade has been burdened in a short span of 30 days with such additional costs coming in the shape of 'war risk premium' on ships operating in the region, hike in freight charges, rise in insurance cost for import/export consignments and weakening of the dollar against the rupee.

Against these negative developments, there was only one concession from State Bank of Pakistan in the form of a one per cent cut in the export finance rate to 12 per cent.

The exporters are now paying about $500 more (from Oct 1) per container on account of war risk premium: $185; freight rate hike: $150 and cargo insurance (cif): $125 for export shipment and along with this, have to bear the sudden free fall of dollar against the rupee. Exporters fear that the country will end up losing around $2.5 billion in export trade alone as western buyers have heavily slashed down the new orders.

Canola seed import exempted from ST

The government has withdrawn sales tax on import of Canola seed. The Central Board of Revenue (CBR) issued a notification in this regard on Thursday. General Sales Tax was levied at a rate of 15 per cent on the import of canola seed under the Sales Tax Act, 1990, while import of rap seed enjoyed exemption from the levy.

Traders warn of fall in exports to Afghanistan

Pakistan's exports to Afghanistan rose from $115 million in fiscal 1999-00 to $140 million in 2000-01, according to a source in Export Promotion Bureau. But exporters say the rising trend may not continue through the current fiscal year if the US air strikes on Kabul protract.

The $25 million increase in the exports to Afghanistan in the last fiscal year is largely due to a $21 million export of wheat flour. Pakistan had harvested 19.2 million tons of wheat in fiscal 2000-01. This coupled with carryover stock of 4.2 million tons enabled the country to produce surplus wheat flour for exports.

Whether Pakistan's exports to the land-locked country maintain a rising trend through this fiscal year is yet to be seen. But traders say much will depend on how soon the US air strikes on Kabul come to an end.

ATT volume shrinks

The volume of Afghan Transit Trade (ATT) has decreased by 50 per cent following the September 11 terrorist attacks on US, well-placed sources told on Tuesday.

The sources said that normally 25 to 30 consignments used to be cleared through Karachi Port daily under the ATT, but in the wake of prevailing tension in the region the number came down to 10 to 15 consignments. Moreover, the daily clearance of consignments on September 11 was only 2, on September 29 there were 12 consignments while only 2 consignments were cleared on October 1, sources added.