Booked quantity under LC allowed via Wahgah: ban on onion export to continue to March-end

The government has decided to continue restrictions on onion exports, but to allow the release of those consignments to India through Wagha border for which Letters of Credit (LCs) were opened before January 5, 2011, official sources told Business Recorder.
"The Commerce Ministry has issued an office memorandum with regard to SRO dated January 5, 2011 aimed at allowing the trucks already loaded and standing outside the check post Wagha border, in addition to those orders, for which LCs have already been opened," sources said.
The government has also decided to lift ban on onion export from March 31, 2011. The office memorandum has been issued as Prime Minister Yousuf Raza Gilani approved a summary of the Commerce Ministry prepared after an inter-ministerial meeting a couple of days ago.
Sources said that the Foreign Ministry, in a smart move, had submitted a note to the Prime Minister for release of loaded trucks and consignments for which LCs were opened before January 4, saying that Pakistan must fulfil its international commitments. The Commerce Ministry also dispatched a similar summary to the Prime Minister for release of stuck up consignments.
Ministry of Commerce, Ministry of Food and Agriculture (Minfa) and Ministry of Industries opposed resumption of onion exports through Wagah border, arguing that any such decision would have negative impact on supply in the local market. As the Commerce Ministry imposed restrictions on export of onions, the commodity prices came down from Rs 80-85 kg to Rs 25-30 kg.
Minfa, Industries and Commerce ministries argued that if the federal government resumed onion exports to India through Wagha border, Pakistani markets would dry up by end of February. Initial reports suggest that at least 400 trucks loaded with onions are stuck at the border as a result of the unexpected export ban by the government, but FBR has confirmed only about 70 trucks. Analysts forecast increase in domestic onion prices after the release of withheld consignments.