ISLAMABAD: Shipping agents have warned the cash-strapped Pakistan government that all exports could come to a standstill as foreign shipping lines are considering shutting down their services to the country after banks refused to allow them due to lack of availability of dollars. Have stopped paying freight charges. A media report on Saturday.
Apart from bordering countries, almost all international logistics from Pakistan are provided by sea and any disruption can cause serious problems for the country’s international trade. Pakistan Shipping Agents Association (PSAA) President Abdul Rauf has warned Finance Minister Ishaq Dar through a letter.
“If international trade is stopped, the economic situation will worsen,” the association warned.
Dawn newspaper reported that the PSAA president also wrote letters to State Bank of Pakistan (SBP) governor Jameel Ahmed, commerce minister Syed Naveed Namar and maritime affairs minister Faisal Sabzwari.
Rauf requested the concerned ministries and departments to intervene to ensure continuity in Pakistan’s maritime trade by allowing outward remittance of additional freight amount to the concerned foreign shipping lines.
“Due to the closure of outward remittance of excess freight amount to the concerned foreign shipping lines, the maritime trade of Pakistan, which is heavily dependent on foreign shipping lines, is being hampered,” the letter said.
Rehman Malik, who is working as an agent and a member of the All Pakistan Customs Agents Association, said that he has never seen worse times in the past 40 years of working in his field.
“We have thousands of shipping containers at Karachi port due to payment guarantees and most of them carry essential items like medicines, raw material diagnostic equipment, chemicals and food items,” he said.
“You can understand how all this must be hurting our manufacturing industries,” he said.
Maqbool Malik, president of the Customs Union, said thousands of containers were stranded due to lack of dollars.
However, the crisis pertains to export cargo as all outward trade from Pakistan is container-based, with no liquid or grain exports from the country.
The state-owned Pakistan National Shipping Company (PNSC) only handles the import of crude oil and other petroleum fuels through its 12 ships.
Analysts say the stock is enough for just one month’s imports.
Pakistan’s annual freight bill is around $5 billion, and foreign companies receive fees mainly in “greenback” international currencies.
Shipping agents have pointed out that due to the current situation, the shipping sector was already suffering due to economic fluctuations, and any further delay in remitting their legitimate dues would hamper Pakistan’s external trade.
However, speaking to the newspaper, former PSAA president Muhammad Rajpar said that Pakistan was not yet close to an economic downturn, so the government still has time to find a way out of the current crisis.
“We can always have new ideas to get out of the difficult times, one of them being dollar hedging and tranches for payment to shipping companies,” Rajpar said.
Pakistan’s foreign exchange reserves had declined sharply in recent weeks to more than $4 billion, sparking fears that the country could default and prompting the SBP to impose tighter controls on foreign payments.
Meanwhile, the Petroleum Division has warned the central bank that stocks of petroleum products may dry up as banks are refusing to open and confirm Letters of Credit (LCs) for imports.
According to The Express Tribune, like other sectors, the oil industry in Pakistan is facing constraints in opening LCs due to shortage of US dollars and restrictions imposed by the SBP.
Apart from bordering countries, almost all international logistics from Pakistan are provided by sea and any disruption can cause serious problems for the country’s international trade. Pakistan Shipping Agents Association (PSAA) President Abdul Rauf has warned Finance Minister Ishaq Dar through a letter.
“If international trade is stopped, the economic situation will worsen,” the association warned.
Dawn newspaper reported that the PSAA president also wrote letters to State Bank of Pakistan (SBP) governor Jameel Ahmed, commerce minister Syed Naveed Namar and maritime affairs minister Faisal Sabzwari.
Rauf requested the concerned ministries and departments to intervene to ensure continuity in Pakistan’s maritime trade by allowing outward remittance of additional freight amount to the concerned foreign shipping lines.
“Due to the closure of outward remittance of excess freight amount to the concerned foreign shipping lines, the maritime trade of Pakistan, which is heavily dependent on foreign shipping lines, is being hampered,” the letter said.
Rehman Malik, who is working as an agent and a member of the All Pakistan Customs Agents Association, said that he has never seen worse times in the past 40 years of working in his field.
“We have thousands of shipping containers at Karachi port due to payment guarantees and most of them carry essential items like medicines, raw material diagnostic equipment, chemicals and food items,” he said.
“You can understand how all this must be hurting our manufacturing industries,” he said.
Maqbool Malik, president of the Customs Union, said thousands of containers were stranded due to lack of dollars.
However, the crisis pertains to export cargo as all outward trade from Pakistan is container-based, with no liquid or grain exports from the country.
The state-owned Pakistan National Shipping Company (PNSC) only handles the import of crude oil and other petroleum fuels through its 12 ships.
Analysts say the stock is enough for just one month’s imports.
Pakistan’s annual freight bill is around $5 billion, and foreign companies receive fees mainly in “greenback” international currencies.
Shipping agents have pointed out that due to the current situation, the shipping sector was already suffering due to economic fluctuations, and any further delay in remitting their legitimate dues would hamper Pakistan’s external trade.
However, speaking to the newspaper, former PSAA president Muhammad Rajpar said that Pakistan was not yet close to an economic downturn, so the government still has time to find a way out of the current crisis.
“We can always have new ideas to get out of the difficult times, one of them being dollar hedging and tranches for payment to shipping companies,” Rajpar said.
Pakistan’s foreign exchange reserves had declined sharply in recent weeks to more than $4 billion, sparking fears that the country could default and prompting the SBP to impose tighter controls on foreign payments.
Meanwhile, the Petroleum Division has warned the central bank that stocks of petroleum products may dry up as banks are refusing to open and confirm Letters of Credit (LCs) for imports.
According to The Express Tribune, like other sectors, the oil industry in Pakistan is facing constraints in opening LCs due to shortage of US dollars and restrictions imposed by the SBP.