Day: November 16, 2021

Commerce Ministry informed a National Assembly Panel that Pakistani’s Basmati rice exports to Saudi Arabia, United Arab Emirates (UAE), and Kenya have taken a hit due to various reasons and highlighted steps being taken by the government to revive the exports.

While briefing the National Assembly panel headed by Shandana Gulzar, Director General Ministry of Commerce, Dr. Syed Kausar Zaidi, informed that Pakistani’s Basmati rice exports to Saudi Arabia, United Arab Emirates (UAE), and Kenya have taken a hit due to various reasons and highlighted steps being taken by the government to revive the exports.

Zaidi expressed hope that the Prime Minister’s recent visit to Saudi Arabia will have a positive impact on the export of rice. He pointed out that Saudi Arabia is primarily relying on India for the import of rice. He further told that several Saudi investors have set up rice mills in India that export rice to Saudi Arabia, which has dented Pakistan’s export of rice.

Highlighting the reasons for the struggling basmati rice exports, he said that exports to Kenya and UAE have also declined, while China and the Philippines are big markets for Pakistan, but they don’t import basmati rice. Zaidi also briefed the panel on the status of the rice containers that were held in France and Belgium and said that the issue has not been resolved.

He told that Sri Lanka has also requested Pakistan for an additional quota of 0.2 million tons of rice. This will be in addition to the quota already assigned under the Free Trade Agreement (FTA).

The panel was informed that the government is undertaking a number of initiatives to revive the export of Basmati rice.

Zaidi highlighted that to boost the exports, the Ministry wants to give rice the status of industry but the Ministry of Industries and Production (MoI&P) has shown reluctance in the matter as it is a provincial subject.

During the meeting, lawmaker Nawabzada Shazain Bugti raised the issue of the non-availability of water in Dera Bugti and said that the area is ideal for the growth of rice.

The panel will submit its report to the Special Committee of the National Assembly on agriculture products headed by the Speaker National Assembly.

Source: Pro Pakistani

The federal government is considering paying maximum dividends to shareholders from the profit made by state-owned companies listed in the Pakistan Stock Exchange (PSX).

The proposal is being considered with an aim to bring down the soaring circular debt and boost the stock market that has underperformed for several years.

Speaking in this regard, the Adviser to Prime Minister on Finance and Revenue, Shaukat Tarin, said that if energy companies are unable to pay dividends to shareholders due to circular debt, they can use higher dividends received from state-owned entities and reduce the circular debt.

The circular debt stands at Rs. 2.5 trillion. If this strategy can help pay off the circular debt of around Rs. 300-400 billion, then it will be deemed a successful strategy.

He added that the government doesn’t need the dividend income and energy companies can use it to decrease the circular debt. The government will still earn higher dividends regardless of whether it transfers the dividends to the exchequer or uses this money to reduce the circular debt.

The state is the biggest beneficiary of the profit that state-run companies make because it is the majority shareholder in almost all of these firms listed in the PSX.

It was forced to cut down dividends of other shareholders due to circular debt and liquidity crunch. This made the shares of state-run companies unattractive, not only bringing down their stock prices but also crashing their market valuation.

For instance, Pakistan Petroleum Limited (PPL), a state-owned petroleum company, used to give 55% of its profit in dividends to shareholders several years ago. However, PPL is only offering 18% of its profit in dividends to shareholders now.

This strategy not only will increase the market valuation of these companies that are considered heavyweights in the stock market but will also encourage investors to increase their stakes in these companies.

Commenting on this development, Chairman Arif Habib Limited (AHL) Arif Habib lamented that the state lowered the dividend payment to shareholders of state-run companies, adding that a higher dividend payment can certainly ease the circular debt.

He added that low dividend payments caused the stock prices of state-owned companies such as the Oil and Gas Development Corporation Limited (OGDCL), Pakistan State Oil (PSO), and the National Bank of Pakistan (NBP) to plunge to a historic low.

Source: Pro Pakistani

Pakistan has surpassed China in denim apparel exports to the United States (US), as per international media reports.

According to an analysis of Apparel Resources – an India-based textile trade publication – Pakistan’s annual exports of cotton-made clothing to the US touched the $276 million mark ($275.89 million) from January-September 2021, surpassing China’s $274.63 million worth of exports.

This is a 63.40 percent increase compared to the corresponding period of last year when Pakistani shipments to the US accounted for $168.85 million against China’s $238.75 million.

These dominating export figures have also reduced the gap with Vietnam’s denim exports to the US worth $278.69 million during the same period.

Bangladesh remained the top supplier to the US, with its shipments crossing $520.16 million – a 31.40 percent yearly increase.

Mexico followed closely with $471.78 million worth of denim supplies to the US, recording an annual growth of 46.53 percent.

This has been possible due to the business-friendly policies of the Biden administration despite the constraints caused by the COVID-19 pandemic.

According to OTEXA data, during the first nine months of 2021, the US market has imported denim clothing worth $2.54 billion, noting a 28.56 percent surge on a year-on-year basis.

Source: Pro Pakistani