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 1. INTERNATIONAL   2. INDUSTRY
 3. FINANCE  4. POLICY
 5. TRADE  6. GULF

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TRADE

June 17 - 23, 2002

EXPORTS DECLINE SLIGHTLY: IMPORTS SLOW

Pakistan's merchandise exports declined slightly by 0.96 per cent during the period July-May (2001-02) over the corresponding period of previous year, according to the foreign trade statistics released by the Federal Bureau of Statistics (FBS) on Monday.

Exports totalled $8.17 billion close to 91 per cent of the modest target of $9 billion for the current financial year that had been fixed by the commerce minister apparently as a face- saving device.

The negative growth concerns the cumulative performance of the first 11 months of the current financial year with exports moving sluggishly in the initial months. But when one looks at the figures provided by the FBS concerning May 2002, the exports appear to have picked up momentum.

The exports during the month amounted to $846.16 million 7.66 per cent more than the previous month (April 2002) and 6.67 per cent more than in May 2001.

During the 11-month period under review, imports also slowed. These amounted to $9.36 billion, down 4.46 per cent from the corresponding period of previous year. However, imports during May shot up to $1.12 billion 25.72 per cent more than in April 2002. These also exceeded the imports during corresponding month of previous year by as much as 18.72 per cent.

The negative growth rate of both exports and imports contributed to a sharp 23.06 per cent drop in trade deficit to $1.120 billion, as compared to $1.55 billion in the corresponding period of 2000-01.

A significant aspect of the exports is the surge of wheat as an item of export. In spite of severe drought, Pakistan has found itself in the dilemma of what to do with its surplus wheat. Last year, the country had exported about 31,000 tons of wheat. The quantity of wheat exported this year so far is 5,65,864 tons. Consequently, the share ($62.8 million) of wheat in exports of primary commodities has risen to about 8 per cent.

The share of manufactured exports in total exports this year has been 91.77 per cent, compared to 89.39 per cent for the corresponding period of previous year. This was, of course, attributable to 17.58 per cent decrease in exports of primary commodities.

$566M SAVED AS POL IMPORTS DROP BY 20PC

Pakistan saved $566 million over last year's oil spending as petroleum imports dropped by 20 per cent during the first ten months (July-April) of the current fiscal.

According to Economic Survey 2001-02, total imports during the first ten months of the current fiscal declined by 6.9 per cent to $8.245 billion as against $8.859 billion of the last year. Major decline in imports during July-April have been observed in food and petroleum groups.

This 15.1 per cent decline in crude oil import clearly showed that this had a negative impact on the industrial sector as low POL consumption was indicative of slower industrial activity and productivity. Total oil imports this year amounted to $2.222 billion against $2.779 billion of July-April last year period.

0.15M TONS SUGAR EXPORT TO KABUL LIKELY

Pakistan is expected to export up to 150,000 tons of sugar to Afghanistan once loya jirga proceedings are over by end of this month, official sources told.

The Afghan trade delegation that visited Pakistan last month had expressed its desire to import around 100,000 tons of sugar from Pakistan. Islamabad had briefed the delegation that it had enough surplus sugar to meet Afghan requirements.

Sources in the commerce ministry said that Pakistan Sugar Mills Association (PSMA) and other exporters had told the government that given the existing duties and taxes, Pakistani sugar could not compete international market.

BONDED WAREHOUSES

Importers have started piling up goods in bonded warehouses ahead of 2002-2003 budget in order to gain some windfall after smelling that the government is curtailing import duties to 25 per cent from 30 per cent on various items as per WTO's requirement.

Market sources said that the rate of keeping the goods in bonded warehouses has gone up prior to the budget.

KPT UPLIFT PROJECTS REVIEWED

Minister for Communications and Railways Javed Ashraf Qazi has directed to establish close coordination among various departments of ports and shipping so that their performance could be improved.

The minister was presiding over a high-level meeting on Monday in which development projects of Karachi Port Trust were reviewed in detail.

He said that ports and shipping sector enjoyed key significance in economic uplift of the country and added that every possible steps would be taken to modernize this sector.

He said that role of communications departments in all round development was an accepted one. He said the existing leadership of Pakistan was undertaking concrete steps for development of ports and shipping because the ports of Pakistan possessed vital significance in regional trade activity in the future.

BD, PAKISTAN AGREE TO PROVIDE FACILITIES

Bangladesh and Pakistan on Saturday agreed to work together for providing bonded warehouse facilities on bilateral basis, with a view to boosting trade between the two countries, an official announcement said.

The two sides have also agreed to review the free-trade market access arrangements on the basis of South Asia Preferential Trade Agreement (SAPTA), it said.

COTTON SITUATION

The current situation and possible market prices of lint and seed cotton was discussed in a meeting of Pakistan Central Cotton Committee (PCCC) held under the chairmanship of M. Shafi Niaz, Advisor to Chief Executive on Food, Agriculture and Livestock on Thursday.

The committee showed its concern on prevailing imports trend of raw cotton. It was told that 1.3 million bales of 170 kg each have been imported so for, which was likely to be more by end of current season.