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REUTERS
Karachi: Pakistan's vegetable oil imports are likely to remain slow as importers continue to face problems opening letters of credit with banks, dealers said last week.
They said domestic prices came off in line with prices in the international markets but were still high enough to keep imports attractive.
"The confusion and problems facing importers in getting foreign exchange and opening letters of credit is still a major factor discouraging importers to go for big orders," a vegoil dealer at a major trading house said.
Uncertainty following international sanctions to punish Pakistan for its nuclear tests in May and major changes and curbs on foreign exchange transactions has led to confusion among importers and banks.
Vegoil is regarded as an essential import item and has been saved from most of the curbs and policy changes, yet dealers say imports have been hit by rising confirmation charges on opening letters of credit and reluctance by bankers to entertain large demands for foreign Karachi: Pakistan's vegetable oil imports are likely to remain slow as importers continue to face problems opening letters of credit with banks, dealers said last week.
They said domestic prices came off in line with prices in the international markets but were still high enough to keep imports attractive.
"The confusion and problems facing importers in getting foreign exchange and opening letters of credit is still a major factor discouraging importers to go for big orders," a vegoil dealer at a major trading house said.
Uncertainty following international sanctions to punish Pakistan for its nuclear tests in May and major changes and curbs on foreign exchange transactions has led to confusion among importers and banks.
Vegoil is regarded as an essential import item and has been saved from most of the curbs and policy changes, yet dealers say imports have been hit by rising confirmation charges on opening letters of credit and reluctance by bankers to entertain large demands for foreignexchange.
"The local (domestic) market prices are still high compared to the cost of import, but the uncertainty in the financial sector has left importers with no choice but to wait and see," the dealer added.
He said most of the major importers have decided to wait for the arrival of the domestic sunflower and cotton crop before placing major import orders.Cottonseed and sunflower oil are Pakistan's major domestic source of vegoil which are mixed or blended with palm oil and soyoil to make cooking oil.
Pakistan's consumption of vegoil is estimated an annualaverage of around 1.5 million to 1.85 million tonnes. Domestic vegoil production fluctuates between 400,000 tonnes to over 500,000 tonnes a year.
The country's total palm oil and soyoil imports were891,942 tonnes in fiscal 1996/97 compared to 1.143 million tonnes in 1995/96.
However, a lower than estimated cotton crop this year hadpushed imports up.Import of palm oil and soyoil in July-June 1997/98 was1.172 million tonnes, up from 1.057 tonnesin the same period of 1996/97.
Pakistan's total cotton output for 1997/98 (July-June) was8.355 million 375-lb bales, compared to 8.7 million bales in the same period a year ago.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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