Concern on problems faced by Pakistani exportersNovember 25, 2014
Karachi: The Union of Small and Medium Enterprises (UNISAME) voiced the concern of the SME exporters of commodities who face problems due to fall in prices of various commodities in the international market due to growing production in agricultural countries.
President UNISAME Zulfikar Thaver said the SME exporters of rice, wheat, maize, sugar, salt, spices, sesame seeds and dry fruits are facing non retirement of documents for goods shipped by them to the consignees on their firm orders. Due to fall in prices the buyers are asking for discounts and deliberately finding faults in documents and goods to cover their own losses due to fall in prices.
He said the Internet has educated the buyers who are now aware of the current prices, globally and have become clever buyers.
Thaver said when the prices increase the buyers compel the sellers to ship their goods on the agreed prices but when the prices decrease after shipments the buyers claim for discounts in violation of the contracts.
Thaver called upon the commercial banks that are negotiating the documents of the exporters not to entertain false discrepancies in the documents and claim their full invoice value and insist on the opening banks to honour the bill of exchange drawn under the contracts.
The SME exporters are in turmoil also due to the exchange rate of the rupee as against the dollar as they tend to lose when the rupee gains strength because they get less proceeds for their invoice amount which indicates the prices in US dollars.
The SME exporters of rice are facing more issues as on the one hand Iran has temporarily disallowed import of rice to first exhaust its own crop till the end of the year and on the other hand the prices of Indian rice is lower than Pakistani basmati rice, besides India has arrangements with Iran for payments when Iran renews buying.
The UNISAME has time and again urged the government to conclude currency swap with Iran but unfortunately the government is not bold enough to enter into currency swap with Iran due to no green signal from influential world quarters. It is to be noted that there cannot be sanctions on food, medicine and humanitarian relief goods items but as far as Iran is concerned the international money clearance house has boycotted this country and has refused to oblige them. India has managed to arrange for transfer of funds from Iran and is promoting transactions to support importers and exporters satisfactorily.
It is very important for Pakistan to facilitate the exporters of rice and other food items to and from Iran otherwise the prices of basmati rice will not increase and this will affect the agricultural sector.
UNISAME appreciated the subsidy given to SME rice farmers of Rs 5000 per acre and urged the government to facilitate the farmers by exempting the farm inputs from all taxes and levies to support them.
However the union is against the buying of rice by the government as it leads to corruption. The rice purchased in 2008 by the government resulted in huge losses as it could not be sold due to admixtures and foul play. It is best instead to give direct benefit to farmers and exporters without the intervention of food procurement agencies. It is hoped the government will not repeat the mistake of procuring rice and act wisely.