• Razak Dawood holds out assurance
MUSHTAQ GHUMMAN
ISLAMABAD: Prime Minister’s Advisor on Commerce, Industries and Production and Investment Abdul Razak Dawood said on Thursday that the government would soon announce a relief package for the affected exporters.
“I want to assure our exporters that the government is fully aware of the difficulties faced by them due to coronavirus. In the coming days, we will be giving a relief package, particularly to ease the liquidity problems faced by them,” he added.
A committee under the chairmanship of Finance Advisor Dr Abdul Hafeez Shaikh is already reviewing the situation on a daily basis to evaluate the losses being incurred by the exporters.
According to an official document, the Trade Advisory Committee, comprising different ministries, is of the view that considering Pakistan’s rising global export trend, the government can take facilitative measures to support the domestic industry through rationalization of regulatory duties/additional customs duties, advance sales tax on 62 selected tariff lines concerning raw materials of textile, engineering, fertilizers and pharmaceuticals.
The committee has observed that this step will provide relief to the importers and would cover costs of higher world prices of raw materials, and additional costs of sourcing from countries where higher tariffs will apply (zero or lower due to the FTA).
Pakistan’s imports in value terms from the world from February 1, 2020 to March 18, 2020 have reduced by about $200 million, of which a large portion was those which were enjoying duty exemptions under the CPFTA.
The sources said, through the TAC, the TDAP was tasked to hold consultations with all the stakeholders of trade and share their inputs, proposals, concerns and recommendations.
The TDAP held consultation with 12 trade associations representing sectors including auto, electric fans, and cosmetics, marble, rice, pharmaceuticals, surgical instruments, readymade garments, leather, and textiles etc.
The overall response received from 12 associations suggest that importers are facing delays in supplies. However, stocks are available for 30 days or more and have not reached critical levels, while business activities in China are improving quickly.
China is expected to be back to normal within a month’s time, except for Hubei province, for which the time period of restoration of activities is two months.
Top declining exports of Pakistan include rice, ethyl alcohol, cotton yarn, chromium ores, cotton fabric, raw leather, natural sands, marble, vegetable saps, natural steatite, flour and meals, and sacks and bags. In terms of absolute value the biggest decrease in exports to China has been observed in rice for February 2020, i.e. 85 per cent.
Rice Exporters Association of Pakistan (REAP) has informed that Chinese market is expected to rebound quickly, however, if demand does not pick up in China, orders of rice can be diverted to Africa, which is a huge market of Chinese Irri-6 variety.
The TDAP’s consultation with Sea Food Association and response received from Trade and Investment Officer in Bangkok hints an expected decrease in exports of fish and fish products to Thailand mainly because of the fact that the tourism industry of Thailand has been badly affected by the outbreak.
Around $160 million of fish and fish products is exported to Thailand, which constitutes around 56 per cent of total exports of Pakistan to Thailand.
The textile wing held consultative sessions with all the related trade associations and informed that although prices of polyester yarn began to rise earlier, however they are now showing decreasing trend and moving towards stabilization.
They further informed that in terms of readymade garments, orders have diverted from China to Pakistan, which will result in improved export figures for exports to the US and the EU.
The statement is corroborated by export figures for February, 2020, where although overall exports to China has decreased by 16 per cent, yet Pakistan’s exports to the world has increased by 13 per cent.
