ISLAMABAD: Chief Executive Officer (CEO) Harvest Tradings, Ahmad Jawad has said that the local banks are no more opening letter of credits (LC) for export of goods, especially rice, for Iran in the light of economic sanctions.
“We need to take some measures immediately to continue this trade, including Currency Swap Arrangements, Barter Trade Arrangements and LC Transaction Arrangements with Iran, as rice exports have plunged significantly due to ban on exports to Iran.”
Talking to INP here on Thursday, Ahmed Jawad said that India had successfully launched their economic diplomacy to grab the opportunity for Indian rice in Iranian markets.
As Iran’s oil export revenues are helping Indian rice exporters to claw back some of the lucrative business lost to cross-border truckers in Pakistan.
He said that Iran was also allowed to open letters of credit in Indian rupees because the government had to pay money to Iran for the oil.
“For the importers back in Iran, Indian rupees are easily available to them via the government, so they can do business in a much easier way than doing business in any other currency”, he added.
He said similarly Dubai’s role in the India-Iran rice trade has withered since oil pool payments started.
The Harvest Tradings CEO said that from April 2011 to the end of March 2012, $821 million of Indian rice was shipped to the United Arab Emirates, more than anywhere else. But in just nine months from April to December last year, Iran imported over $725 million of Indian rice, up by 20 percent on the previous 12 months, while Indian exports to the UAE slumped to $287 million.
He said there is effectively no limit to how much Indian rice exports to Iran can be funded by the oil money pool, because even when India’s oil imports from Iran fell more than 40 percent from January 2012 to 2013, their value was still nearly $1 billion in one month. “The new payment mechanism has been helping Indian rice exporters, as Pakistan don’t have any such alternative.”
In comparison Pakistan exported around 30,000 tons of rice, worth $21 million, directly to Iran in the second half of 2012, a sharp fall from the 12 months to the end of June 2012 when sales approached 140,000 tons.
Jawad further said the success of India’s oil pool for funding exports direct into Iranian ports over the last few months has hit Pakistan’s rice truckers’ profits hard.
He emphasized that we need to draw workable strategy and grab the Iran & Afghanistan markets properly for our products, failure to do so India may engage at huge level which will have a negative impact on our exports.
<Center><b><i>Copyright INP (Independent News Pakistan), 2012</b></i></center>
Comments
Comments are closed for this article.