recorder report
ISLAMABAD: Pakistani ghee and cooking oil industry would take up the issue of assessment of duties and taxes by the customs authorities of Federal Board of Revenue (FBR), on FOB price which is higher than actual transacted value on import of palm oil from Malaysia, at PVMA-Malaysian Palm Oil Industry Trade Forum to be held at Kuala Lumpur.
It is learnt that a Pakistani delegation of Pakistan Vanaspati Manufacturers Association (PVMA) has left for Kuala Lumpur to have trade discussions with the Malaysian palm oil industry members in March 2015 to improve trade between Pakistan-Malaysia. The basic rationale behind discussions would be exploring prospects to increase imports from Malaysia The presentation on Oils & Fats Industry in Pakistan would be given by Umer Islam of PVMA and other speakers include Faisal Iqbal and Atif Ikram, Chairman PVMA.
The industry would plead their case at Malaysia to strategize and plan for strategic moves in improving trade ties between the two countries at the PVMA - Malaysian Palm Oil Industry Trade Forum. One of the major issues to be discussed between the two sides is that the customs authorities in Pakistan time and again stress to asses taxes on Freight On Board (FOB) price mentioned on Certificate of Origin, which is comparatively higher than actual transacted value as per contracts.
Pakistani industry would give recommendations to the Malaysian palm oil industry to improve trade between the two countries. It would recommend that the imports in Pakistan to be materialized on shipped quality and landed weight basis, with a condition of joint surveying at both loading and discharging ports. There shall be no additional cost of surveying since already the surveying costs are borne by importers and exporters.
Out of net savings of $ 6-8/M Ton by importer and no claims against exporters a portion can be dedicated for administrative or un-expected expense, if any, it recommended. The exporters will not encounter claims, since joint survey report shall be final and hence court cases can be avoided.
It further recommended that other service providers such as terminals at both ends and ship-owners have to be taken on-board to successfully execute joint surveying procedure. PVMA and PORAM to execute agreement for ensuring implementation of joint surveying report on all stake-holders.
It recommended opening of a Bank of Malaysia branch in Pakistan for revival of Palm Oil Credit Payment Agreement (POCPA). This arrangement will give strength to imports from Malaysia.
Currently Margin of Preference (MOP) extended to Malaysian imports is 15%, which is recommended to be enhanced up to 20-25 percent.
Trade imbalance in year 2013 is US$ 1,746 Million in favour of Malaysia against total export of US $ 1,957, since exports from Pakistan stood at US $ 211 Million only. Trade imbalance in year 2013 is US$ 1,064 Million in favour of Indonesia with total exports of US $ 1,208 million. Pakistan managed to export goods amounting to US $ 144 million.
In case of PTA with China, the trade imbalance was improved in favour of Pakistan by re-adjusting the MOP. Identical mechanism can be adopted to improve trade imbalance, which will boost export of Palm Oil products from Malaysia, Pakistani industry said.
PVMA and Consortium of MPOC and PORAM, etc, to keep relevant governments updated on issues arising from misinterpretation of PTA.
Since mid-80s the oil seed production in Pakistan has not seen much growth and the practice seems to continue during next decade forecasted by Agriculture Research and Analysis wing of Pakistan. Therefore, import of Edible Oil is likely to maintain its present momentum.
Pakistani ghee and cooking oil industry would also discuss the irritants of palm oil trade in Pakistan. According to Import Policy Order the imports of edible oil in Pakistan shall be on 'landed weight and quality' basis. As per FOSFA rules contracts are executed on 'shipped weight and quality final' basis.
Due to out-turn weight discrepancies the importers with the assistance of local legal firm arrest the ships calling Pakistan Ports. Whereas the ship owner after depositing bank guarantees release the ships and in turn lodge claim to exporters in Malaysia. The exporters settle the claims with importers by arbitration, the portion of which is pocketed by legal firm as fee. The administrative expenses and delays further increase the cost of doing business borne by exporter and importers, it said.
About the emerging geopolitical outlook, Pakistani delegation would inform that the sea-ports of Port Qasim and Karachi are fully functional and Gwadar Port has been handed-over to China for meeting its import/export requirements via land route. Gwadar-Kashghar economic/trade and transit corridor bill has been assented by National Assembly and shall be functional by year 2018.
