ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has directed Commerce Ministry to review Export Facilitation Scheme (EFS) in consultation with FBR in a holistic manner and bring viable proposals for revamping of EFS to the ECC for consideration.
According to official documents, Ministry of Commerce recently briefed the forum that the ban was imposed on export of wheat and wheat products in 2019 vide SROs 1044(1)/2019 dated 11th September 2019 and 1481(1)/2019 dated 29th November, 2019.
The ban was imposed to ensure sufficient supply of wheat and wheat products including flour, fine, Maida, Suji, etc., in the local market. Thus export of the said commodities was banned vide Sr. No. 19 of Schedule-I of the Export Policy Order 2022. The above ban on the export of wheat and wheat products had been without any exception.
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However, some food processing industries had approached the Ministry of Commerce with the request that they may be allowed to export processed wheat products, having 20 to 25% value addition, manufactured from imported wheat under the Export Facilitation Scheme (EFS) 2021.
Commerce Ministry argued that as such, they would not procure wheat from local market rather they would import wheat from different countries under the Export Facilitation Scheme (EFS), 2021 and export value-added products afterwards.
The companies had requested to allow export of wheat under the EFS, 2021 as they intended to participate in international tenders for supply of wheat flour to international donor agencies like the World Food Program (WFP) of the United Nations, as well as, supply to various international markets in view of their consistent demand.
Thus, by allowing Pakistani firms to participate in such international tender for supply of wheat products, Pakistan can earn substantial amounts of forex. To ensure that the said facility may not distort supply of wheat in domestic market, exporters would be required to import their input material (wheat) from international sources under EFS 2021 (import-cum-export) subject to compliance with national import regulations and standards of quality set by procuring donor agencies.
Ministry of Commerce endorsed the said proposal to allow wheat flour under EFS based on imported wheat. It was stated that Ministry of National Food Security & Research had supported the proposal of this Ministry subject to certain conditions: (i) that only those companies registered under EFS shall be entitled to benefit from the export facility, (ii) that local wheat from the local market shall not be allowed; and (iii) import and export wheat/ wheat flour shall be brought under track-and-trace system of FBR.
However, FBR had raised some concerns regarding the proposal and suggested that detailed analysis of the proposal be carried out. In order to address the concerns of FBR, Ministry of Commerce held a consultative meeting in which representatives from the private sector were also invited. The concerns of FBR were addressed in the meeting.
Ministry of Commerce proposed that exporters/ companies registered under the Export Facilitation Scheme, 2021 may be allowed to export wheat flour manufactured from wheat imported solely for exports, and necessary amendment in this regard may be made in the EPO 2022.
During the ensuing discussion, it was stated that proposed export of wheat would provide an opportunity to investors for supply of wheat flour to international donor agencies like the World Food Program (WFP) of the United Nations, as well as, supply to various international markets.
For the purpose, no local wheat would be utilized; therefore shortage or price hike of wheat in the country would not arise. Further, it would also facilitate to bolster foreign exchange reserves. It was opined that had there been supporting export data from the last three years’ it would have assisted in taking an informed decision.
However, it was also suggested to look at the big picture and as a one-time proposal it should be approved in the interest of overall national interest which would be served through earning forex. It was suggested that Export Facilitation Scheme (EFS) may be reviewed in consultation with FBR in a holistic manner and viable proposals for revamping of EFS may be submitted to the ECC for consideration.
After detailed discussion, the ECC approved the proposal and the ECC further directed Ministry of Commerce to review Export Facilitation Scheme (EFS) in consultation with FBR in a holistic manner and bring viable proposals for revamping of EFS to the ECC for consideration.
Copyright Business Recorder, 2024