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 5. TRADE  6. GULF



May 06 -12, 2002


Tea trade leaders want prompt remedial measures to check smuggling, otherwise, they fear, volume of smuggled tea will go up to 50,000 tons from the current 32,000 tons.

"The best way to curtail the quantum of smuggling is to reduce the customs duty on imports by 15 per cent," chairman Pakistan Tea Association (PTA), Mohammad Hanif Janoo told a press conference at a local hotel on Saturday.

He said smugglers are currently enlarging their distribution network without check from any agency. As a result of this, the smuggled tea is arriving into Karachi in a very large quantity daily by full truckloads through Quetta.

Afghanistan mainly consumes only green tea, being imported from China, Indonesia, Vietnam, etc., and orthodox black tea from Sri Lanka, Indonesia and India. All the CTC teas imported by Afghanistan from Kenya and other origins are meant for dumping into Pakistan, he said.

An estimated 32,000 tons of tea was smuggled into Pakistan in 2001 as compared to 24,000 tons in 2000 and 21,000 tons in 1999. Genuine imports in 2001 were 105,000 tons as against 111,000 tons in 2000 and 112,000 tons in 1999. Tea consumption pattern in Pakistan has been rising since 1999 from 133,000 tons to 135,000 tons in 2000 to 137,000 tons in 2001.

Janoo said in just three months, January-March, 10,000 tons of tea has found way into Pakistan through illegal channels.

Even if the government, he said, cuts the import duty in 2002- 2003 budget by five per cent, genuine imports will surge to 125,000 tons as compared to 105,000 tons. The Association has urged the Commerce Minister Abdul Razak Dawood on April 24 to cut the import duties to 15 per cent from the current 30 per cent.


The burden on consumers had slightly eased in the last one month as they paid lesser to buy regular kitchen items thanks to uninterrupted supplies of the local crops and imports.

Poultry products, however, turned out to be the sole burden on consumers as their prices rose despite low demand and rising heat wave. Egg prices went up to Rs22 per dozen from Rs19. Poultry live bird prices surged to Rs50 per kg from Rs49 per kg while the chicken meat is selling at Rs85 to Rs88 per kg from Rs80 per kg.

A monthly price survey (from May 1 to April 1) showed that the prices of onion dropped to Rs12-13 per kg from Rs18-20 per kg following imports from India and Iran and arrival of Balochistan crop. Around 4,000 tons of onion have been imported from India.

In wholesale markets, onion was selling at Rs9 per kg as compared to Rs12 to Rs 13 per kg.


About two dozen Pakistani companies are well set to commence their industrial production and commercial operations in the Hamriyah Free Zone in Sharjah, UAE.

Hamriyah is the tenth free zone in sequence to be set up in UAE and second in Sharjah. It is a next generation free zone and offers incentives that far exceeds those given by other free zones in the area. Since commencement of its operations in October 1998 it has attracted an investment of 500 million dollars from 210 companies set up by investors from 19 countries.

"We offer a one-window operation and a completely hassle free environment in Hamriyah," Engineer Rashid Al Leem, Director General of the Hamriyah Free Zone Authority, informed on Saturday (April 27). The investors are from the US, Europe, South Africa, India and many parts of the world who throng UAE a thriving business centre of the world that can be compared to the Asian Tigers.


In rich states, taxes are lowered to pull economies out of recession or when the initial signs of a slow-down appear. And emerging economies like Pakistan need investment-oriented taxation policy to spur economic growth and reduce poverty.

As budget deficits become unmanageable, governments, however, tend to opt for revenue-oriented taxation whose yields decline when investment and growth stagnates. Both the growth and the tax revenue potentials are thus not realized. This is the situation that prevails now in Pakistan.


The exporters will continue to get export finance from the banks at a maximum markup of 8 per cent in May 2002 as the State Bank of Pakistan has left the export refinance rate unchanged at 6.5 per cent.

The banks give export finance to the exporters at a rate 1.5 per cent higher than the rate at which they get export refinance from the SBP.

In April, the central bank had increased export refinance rate by 50 basis points to 6.5 per cent. An SBP circular issued to all banks on Saturday said the SBP would keep the rate unchanged for May 2002.


The chairman, Export Promotion Bureau (EPB), Tariq Ikram said Saturday that Asian Development Bank (ADB) will conduct a study for the restructuring of the Bureau.

He was addressing the members of the Karachi Chamber of Commerce and Industry (KCCI). Ikram said that a foundation has been laid for a new EPB in the country during the past one and a half year. He said ADB will finance the study on EPB for further improving its performance.


The government is likely to levy five per cent customs duty on import of raw wool and raw cotton from the financial year 2002-03. Well-placed sources told on Saturday that the decision was expected to be announced at the forthcoming budget for 2002-3. These items are currently imported at zero rate of customs duty.

When contacted, customs officials said that it was not decided to levy tax on these items, but the same were under consideration. They said that there was a proposal to levy customs duty on these items to boost its exports.