Foreign shipping lines may stop services for cash-strapped Pakistan: Report

The ship agents have forewarned the cashstrapped Pakistani government that all export cargoes could come to a halt as foreign shipping lines are considering stopping their services for the country after banks stopped remitting freight charges to them due to a lack of dollar availability according to a media report on SaturdayApart from bordering countries almost all the international logistics from Pakistan are catered by sea and any disruption could create serious issues for the countrys international trade Pakistan Ships Agents Association PSAA chairman Abdul Rauf warned Finance Minister Ishaq Dar through a letterAlso read Terrorism alive in JK can be ended only by holding dialogue with Pakistan Farooq AbdullahIf the international trade is stopped the economic situation will worsen the association warned adding that the foreign shipping lines are already considering winding up their services in Pakistan due to reduced cargo volumesThe PSAA chairman also wrote letters to State Bank of Pakistan SBP Governor Jameel Ahmed Commerce Minister Syed Naveed Namar and Maritime Affairs Minister Faisal Sabzwari the Dawn newspaper reportedRauf requested the ministries and departments concerned to intervene to ensure continuity in Pakistans seaborne trade by allowing outward remittance of surplus freight amounts to respective foreign shipping lines forthwithDue to discontinuation of outward remittance of surplus freight amounts to respective foreign shipping lines was hampering Pakistans seaborne trade which is heavily dependent on foreign shipping lines the letter addedHowever the crisis relates to the export cargoes as all the outward trade from Pakistan is containerbased as there are no liquid or grain exports from the countryThe stateowned Pakistan National Shipping Company PNSC only handles imports of crude oil and other petroleum fuel through its 12 vesselsThe annual freight bill of Pakistan is around USD 5 billion and foreign companies receive the charges in international currencies mainly the iquestgreenbackiquestThe ship agents have pointed out that due to the current state of affairs the shipping sector was already suffering due to economic ups and downs and any further delays in remitting their legitimate dues will constrain Pakistans external tradeHowever talking to the newspaper former PSAA chairman Muhammad Rajpar said that Pakistan was not close to an economic meltdown as yet therefore the government still has time to seek a way out of the current crisisWe can always have innovative ideas to get out of difficult times one of them is hedging of dollars and setting installments for the payments to the shipping companies Rajpar saidPakistans foreign exchange reserves had dwindled rapidly to over USD 4 billion in recent weeks creating fear the country may default and prompting the SBP to apply strict control over foreign paymentsMeanwhile the Petroleum Division has warned the central bank that the stocks of petroleum products may dry up as banks are refusing to open and confirm Letters of Credit LCs for importsLike other sectors the oil industry in Pakistan is facing hurdles to opening LCs owing to the US dollar shortage and restrictions put in place by the SBP according to The Express TribuneThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever