KARACHI: Pakistan Soap Manufacturers Association (PSMA) has expressed concern over the ongoing financial crisis, as the Letters of Credit (LCs) are not being honoured by all commercial banks, causing rapid deteriorating Stock availabilities.

The Chairman PSMA Syed Anwer Suhail Razvi has said that if such situation prevails further, there will be an acute shortage of the basic commodities very soon in the entire country as minimum three months will be required to the restoration of supplies on the shelves, once the available stocks are finished.

He informed that soap industry is playing its parts in exports and there has been a substantial surge in exports of soap and allied products during the year 2022.

However, now the industry is forced to stop these due to stoppage of new LCs and the existing stocks are not enough to cater to domestic demand for more than a few weeks. As per estimates, 90 percent of the raw materials used in the soup industry are imported from other countries.

“In view of the above facts, we strongly urge Finance Minister and Governor State Bank to intervene in the situation and extend maximum possible support for the import of following two basic oils/ oil derivatives,” he demanded.

Palm Stearin with monthly demand of 12,000 metric tons, and Lauric Acid with monthly demand of 1,500 metric tons are required and these both raw materials cost is $ 12 million to 15 million. Many soap raw materials including fragrance should be considered for opening of LC & retirement of its documents, he informed.

The Chairman PSMA has demanded the State Bank to immediately issue orders to all commercial banks to open immediate LCs for imports and exports, otherwise local industries will be destroyed and unemployment throughout the country will increase many times.

Copyright Business Recorder, 2023