The government has reportedly decided to seek a special export package from China as compensation of decline in exports destined to China since coronavirus hit China in December 2019. Well-informed sources told Business Recorder that this proposal came under discussion at a meeting of an inter-ministerial Trade Advisory Committee (TAC) constituted to devise a strategy to analyse the possible impact of coronavirus on Pakistan's trade.
A 13-member TAC comprising various officials was meant to analyse any possible impact of disruption in supply chain of raw and intermediary goods from China.
Commerce Ministry has initiated daily monitoring mechanism. 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 consultations with 12 trade associations representing sectors such as 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 not reached critical levels, while business activities in China are improving steadily.
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. The Rice Exporters Association of Pakistan (REAP) has stated that the Chinese market is expected to be 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 the Trade and Investment Officer, Bangkok hints at expected decrease in exports of fish and fish products to Thailand mainly because the tourism industry of Thailand has been badly affected by the outbreak.
Around $160 million of fish and fish products are exported to Thailand, which constitutes around 56 per cent of total exports of Pakistan to Thailand. Textile wing held consultative sessions with all related trade associations and said that although prices of polyester yarn began to rise earlier however, they are now showing decreasing trend and moving towards stabilisation.
They further said 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 have increased by 13 per cent.
According to sources, China requested for the export of six million N-96 masks through the Ministry of National Health, which issued NOCs to only five Pakistani companies for export of around 2.5 million personal protective equipment including N-95 masks to China.
The representative of Ministry of National Health said that as per available data around 35 million surgical masks are available in Pakistan. Representative from the FBR informed that since Ministry of Commerce has not issued any SRO banning exports of masks and currently only letter of the Drug Regulatory Authority of Pakistan (DRAP) is in the fieled, based on which consignment are being stopped from exports.
Representative of the FBR further said that an SRO regarding ban of export of masks has to be issued by the Ministry Commerce. The representative of the Ministry of National Food Security and Research said coronavirus is essentially beta virus present in wild animals and birds.
In view of this, the Ministry of Climate Change that issues NOCs for import of wild animals has been advised by the MNFC&R not to issue permits for import of wild animals from all countries until situation improves.
The Ministry of Commerce has already banned import of animals and birds from China. However, the FBR was of the view that the SRO issued by the Ministry of Commerce in this regard is not comprehensive and does not clarify whether products of animals and birds are also banned from China or just live animals and birds are banned. The Commerce Ministry has now issued clarification that ban applies only on live animals and birds.
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