Monday, May 5, 2008, Rabi-ul-Sani 28, 1429    

Rice shipments be allowed: UNISAME

Karachi—Union of Small and Medium Enterprises (UNISAME) has called upon the authorities concerned to allow shipments of rice cargo below minimum export price (MEP) for all contracts concluded before April 30, 2008 with or without letter of credits (LCs). President UNISAME Zulfikar Thaver said many SMEs have in hand firm orders and have signed contracts with their buyers. In fact the contracts are under lien with bankers who have financed them against it, he said.

Moreover the goods are under process and packing material has been printed with the buyers logos and in some cases the goods are ready for shipments, he noted. He said SMEs have to make shipments for the shipping period ending June 30, 2008 under the contracted prices which are below the MEP to keep up their good relationship with their international buyers.

Thaver said the SMEs have been shipping to their buyers with or without LCs for the last so many years and all shipments without LCs were made after obtaining satisfactory credit reports from their bankers and trade circles. Now they cannot ship to buyers the orders at the contracted prices which are below MEP as they don’t have LCs which is a requirement for shipping below MEP rates, he noted.

In his message to Vice Chairman Rice Exporters Association of Pakistan (REAP), Thaver said that REAP should have explained to the authorities that LC was just a mode of payment, main thing is the contract, all exporters having signed contracts before April 30, 2008 should be given the same treatment as LC holders because LC is just guarantee of payment. He said they are insisting on LCs established before April 30, 2008 for shipments below MEP because they cannot comprehend the fact that LC is also a contract and any exporter who has signed a contract with or without LC is bound to export the accepted order.

UNISAME also called for attention of REAP office bearers that the agreement signed by REAP to supply 200000 metric tons to Utility Stores Corporation of Pakistan (USCP) at subsidized rates is ultra vires as it is beyond the powers of REAP to promise on behalf of exporters any quantity for supplies without their consent.—APP