Pakistani container operators say slow cargo clearance choking storage spaces, affecting revenue generation

This picture taken on February 15, 2023, shows a general view of the Karachi seaport. (AN Photo)
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Updated 16 February 2023

Pakistani container operators say slow cargo clearance choking storage spaces, affecting revenue generation

  • Some cargo which arrived in May 2022 still awaits clearance as Pakistan faces worst forex reserves crisis
  • Pakistani stakeholders say at least 8,000 containers are stuck at ports due to lack of approval for new LCs

KARACHI: With the storage space running out amid delayed clearance of containers at Pakistan’s Karachi port, terminal operators have said the current economic meltdown is hurting their revenue generation and operations.

Pakistan, which is only left with $2.9 billion worth of foreign exchange reserves, has restricted imports to stop the outflow of dollars. Banks have delayed or denied opening of Letters of Credit (LCs) for imports of goods, including industrial raw materials, which has also led to a huge backlog of containers at the country’s ports.

Last year in May, Pakistan’s commerce ministry banned the import of 38 items to control a ballooning import bill and bolster the country’s national currency. The government rescinded the decision in July, though the clearance process remained slow at the ports.

“On normal days, the containers’ clearance from the port takes eight days, but it is now taking about 15 days,” Khurram Aziz Khan, the CEO of Pakistan International Terminal (PICT), a private container terminal in Karachi, said while speaking to a group of journalists on Wednesday. “Even some of the containers that arrived in May 2022 are still stuck, waiting for the completion of documentation process.”

This picture taken on February 15, 2023, shows a general view of the Karachi seaport. (AN Photo)

Khan conceded the process of clearance had started, though he pointed out it had not achieved the normal flow and the backlog was continuing to impact operations.

PICT officials said they had acquired additional space from the Karachi Port Authority due to a lack of storage capacity.

Pakistani shippers also agreed there was a massive backlog to deal with despite the ongoing clearance process.

“Around 8,000 containers remain to be cleared from the ports and penalties are also being imposed,” Aasim Azim Siddiqui, Chairman of All Pakistan Shipping Association, told Arab News. “However, there is no crisis-like situation and the stakeholders are getting maximum relief in terms of space occupation charges and container rent.”

On the other hand, Khan said the current situation was well understood by principal investors who had invested $20 million in recent years and were also providing support to alleviate the critical economic conditions of Pakistan.

However, he maintained a potential investment from overseas investors was also stuck up due to the current economic crunch.

“Potential foreign investment could be in millions of dollars, but due to the lack of profit on their investment, Pakistan’s reputation is getting hit which also makes it difficult to attract foreign direct investment in the country,” Khan said.

Due to import restrictions, the export sector is also being affected as import consignments are lying at the port while they face a raw material shortage to make finished exportable goods.

“Terminal operators themselves are also facing difficulties with the clearance of spare parts,” he said, adding that importing spare parts from Türkiye for necessary maintenance was becoming difficult.

Despite tough conditions faced by the terminal operators, Khan said they had waived off their charges amounting to Rs32 million.

He said the management was negotiating with the government for the renewal of the terminal’s 21-year agreement that will expire in the middle of this year.

“Keeping in view the importance of port infrastructure that plays a key role in the uplift of the country’s economy under the current situation, it is necessary to renew the concession agreement in the same way as the concession agreements of other operators were renewed,” he said.

According to Khan, the operators were planning to invest as much as $100 million after the agreement’s renewal for the improvement of the infrastructure of PICT to increase the efficiency and capacity of the terminal.

Stressing the need for a transshipment facility in Pakistan, the PICT chief said that three million Twenty Equipment Units (TEUs) of cargo were annually handled in Pakistan, even if a small share was obtained from the transshipment market.

He added the transshipment facility will double the cargo handling capacity to six million TEUs within a five-year period while adding to national income.

Respite for oil market amid rate hike worries

Updated 01 June 2023

Respite for oil market amid rate hike worries

  • Oil markets may have been oversold in the last two trading days, says analyst

RIYADH: Oil steadied on Thursday as a potential pause in US interest rate hikes and the passing of a crucial vote on the US debt ceiling bill were offset by a report of rising inventories in the world’s biggest oil consumer.

US Federal Reserve officials on Wednesday suggested interest rates could be kept on hold this month and the US House of Representatives passed a bill suspending the government’s debt ceiling, improving the chance of averting a disastrous default.

Brent crude futures fell 10 cents, or 0.14 percent, to $72.50 a barrel by 1339 GMT while US West Texas Intermediate crude rose 7 cents, or 0.1 percent, to $68.16. Both benchmarks fell on Tuesday and Wednesday.

“Oil markets may have been oversold in the last two trading days,” said CMC Markets analyst Tina Teng. “Sentiment rebounded amid the debt bill’s passage in the House and (the) Fed’s rate hike pause signal.”


Market sources citing American Petroleum Institute figures on Wednesday said that US crude inventories rose by about 5.2 million barrels last week.

• Brent crude futures fell 10 cents, or 0.14 percent, to $72.50 a barrel by 1339 GMT while US West Texas Intermediate crude rose 7 cents, or 0.1 percent, to $68.16.

Mixed demand indications from China, the world’s biggest oil importer, have nonetheless weighed on the market, as has industry data showing a rise in US crude inventories.

Market sources citing American Petroleum Institute figures on Wednesday said that US crude inventories rose by about 5.2 million barrels last week.

“The current mood is one of pessimism,” said Tamas Varga of oil broker PVM. “Investors have been pragmatic and risk averse of late.”

Also in focus is the June 4 meeting of the OPEC+ producer group, in which the Organization of the Petroleum Exporting Countries and allies including Russia will discuss whether or not to cut oil production further.

Barclays forecast

British multinational bank Barclays has slashed the average price of its Brent crude forecast for this year from $92 to $87 a barrel. The bank also slashed its price forecast of Brent for 2024 as it cut the average projected price to $87 a barrel from $97. 

Chinese company in Brazil 

China’s CNOOC Ltd. has begun production at the Buzios5 well off the coast of Brazil, the company said in a statement on Thursday. 

The well is the fifth phase of the Buzios oil field off Brazil’s southeast coast. At an average water depth of 1,900 meters to 2,200 meters, the field is the world’s largest deep-water pre-salt oil field, with daily production of 600,000 barrels, the company said. 

CNOOC’s Brazilian subsidiary owns 7.34 percent of the Buzios shared reservoir, which is 88.99 percent owned by Brazilian state-owned oil and gas company Petrobras.  CNOOC paid $1.9 billion to Petrobras last year to secure a 5 percent stake in a production sharing agreement at the field. 

Pakistan posts record inflation for second consecutive month

Updated 01 June 2023

Pakistan posts record inflation for second consecutive month

  • Inflation of 37.97% in May set national record, adding to problems of balance of payment and risk of sovereign default
  • In April, the bureau said Pakistan's CPI at 36.5% was the highest recorded as well as the highest in South Asia

ISLAMABAD: Pakistan's annual inflation rate rose to 37.97% in May, the statistics bureau said on Thursday, setting a national record for the second month in a row, adding to its problems of a balance of payment crisis and the risk of a sovereign default.

Already in April, the bureau said Pakistan's CPI at 36.5% was the highest recorded, as well as the highest in South Asia, ahead of Sri Lanka, which posted annual inflation of 25.2% in May.

Pakistan's month-on-month rise in May was 1.58%, the bureau said in a statement, adding vegetables, pulses, wheat, wheat flour, rice, eggs and chicken in food items and fuel and gas prices caused the increase.

Inflation has been on an upward trend since early this year after the government took painful measures as part of fiscal adjustments demanded by the International Monetary Fund (IMF) to unlock stalled funding.

The IMF demands include the withdrawal of subsidies, a hike in energy prices, a market-based exchange rate and new taxation to generate extra revenue in a supplementary budget.

Islamabad says it has met the demands, but the IMF has yet to release the $1.1 billion funding stalled since November as part of the $6.5 billion Extended Fund Facility agreed in 2019.

The funding is critical for Pakistan to unlock other bilateral and multilateral financing.

Pakistan’s national currency makes historic recovery against USD in open market — currency dealers

Updated 01 June 2023

Pakistan’s national currency makes historic recovery against USD in open market — currency dealers

  • Appreciation follows central bank’s decision to allow banks to buy dollars from interbank market for credit and debit card payment settlements
  • Rupee was trading at Rs290 in open market during afternoon trading session as compared to Rs315 in the previous day’s trading

KARACHI: Pakistan’s national currency posted historic gains against the United State dollar in the open market on Thursday, following the central bank’s decision to allow banks to buy dollars from the interbank market for credit and debit card payment settlements, currency dealers said.

The rupee was trading at Rs290 in the open market during the afternoon trading session as compared to Rs315 in the previous day’s trading, showing an appreciation of 8 percent, according to dealers. 

“The rupee has appreciated more than Rs25 in the open market and this has happened for the first time in the history of Pakistan,” Malik Bostan, chairman of the Exchange Companies Association of Pakistan (ECAP), told Arab News. 

The currency appreciated in the open market after the central bank on Wednesday allowed authorized dealers, that is banks, to “purchase dollar from the interbank for settlement of the card based cross border transactions with IPS (Instant Payment System),” a notification said.

Prior to the State Bank notification, commercial banks were buying around $15-20 million from the free market per day, putting an excessive burden on it, the key reason for the widening gap between the interbank and open market, according to Bostan. 

“The banks were buying dollars from the open market at Rs315 but they were selling to their customers for the settlement at Rs325,” Bostan said, adding that banks had been buying from the open market but selling to their credit card holders at higher rates which excessively burdened the free market.

“They, Finance Minister Ishaq Dar and Central bank, took the timely decision and allowed them to purchase from the interbank market instead of the exchange companies,” he added.

Bostan’s claims could not be independently verified.

The ECAP chief predicted that the central bank’s decision would lead to further appreciation of the rupee in the open market, to reach close to the interbank rate.

The rupee in the interbank was trading between Rs290 and Rs300 at the end of trading session on Thursday, according to Bostan.

Pakistani analysts said the central bank’s move had eased the pressure on the open market and would also narrow the gap between the open and interbank markets in line with the International Monetary Fund’s conditions.

“The demand for credit and debit card settlement is around $2 billion to $2.5 billion per annum and the central bank’s decision has eased off the pressure from the open market,” Tahir Abbas, Head of the research at Arif Habib Limited, said. “The IMF also wanted to reduce the gap between the exchange rates prevailing in the interbank and open markets.” 

The rupee in the interbank market closed at Rs285.47 against the greenback on Wednesday.

Amid decades-high inflation, Pakistan slashes petrol price by Rs8 per liter

Updated 31 May 2023

Amid decades-high inflation, Pakistan slashes petrol price by Rs8 per liter

  • After revision in prices, petrol will now be sold for Rs262 per liter, says finance minister
  • Pakistan slashes prices of high speed diesel, light diesel oil by Rs5 per liter respectively

ISLAMABAD: Pakistan’s Finance Minister Ishaq Dar announced the government’s decision to slash the price of petrol by Rs8 per liter on Wednesday, as Pakistan attempts to provide relief to the masses amid decades-high inflation. 

Inflation increased to a historic high of 36.4 percent in Pakistan in April 2023, the highest since 1964, after the South Asian country hiked fuel and energy prices to revive a $6.5 billion loan program with the International Monetary Fund (IMF). 

To reduce the burden of inflation from the masses, Pakistan slashed the price of petrol by Rs 12 per liter two weeks ago. The South Asian country revises prices of petroleum products fortnightly. 

In a brief video message on Wednesday, the finance minister said that prices of petroleum products had not reduced drastically over the past 15 days nor had the value of the rupee significantly improved against the US dollar. 

“The maximum that we could reduce the petrol price [a fortnight ago] was Rs12 per liter,” Dar said. “Today, by reducing an additional Rs8 per liter, the price of petrol will reduce by Rs20 per liter in total. So, its price will reduce from Rs270 per liter to Rs262 from June 1,” he added. 

Dar also announced a reduction in the price of high speed diesel by Rs5 per liter and light diesel oil by Rs5 per liter. The price of kerosene oil will remain unchanged, he added.  

The finance minister said after the latest price reduction, high speed diesel, kerosene, and light diesel oil would cost Rs253, Rs164.07, and Rs147.68 per liter respectively.

Pakistan also slashed its oil imports by almost half last month, reducing it by 48 percent to 1.07 million tons during April 2023 as compared to 2.05 million tons during April 2022, a research report by Pakistan’s largest securities brokerage company, Arif Habib Limited, said. 

Where are the jobs? India's world-beating growth falls short

Updated 31 May 2023

Where are the jobs? India's world-beating growth falls short

  • Fewer full-time jobs remain in India since unemployment soared to 20.9% in April-June 2020
  • Without jobs, tens of millions of young people are becoming a drag on the economy, say experts

MUMBAI: On a hot summer afternoon, 23-year old Nizamudin Abdul Rahim Khan is playing cricket on a muddy, unpaved road in the Rafiq Nagar slum in India's financial capital, Mumbai.

Here, there is scant evidence of India's fast-growing economy. Bordering what was once Asia largest garbage dumping ground, Rafiq Nagar and surrounding areas are home to an estimated 800,000 people, most living in tiny rooms across narrow, dark alleys.

The young men and women in the area struggle to find jobs or work, and they mostly dawdle the day away, said Naseem Jafar Ali, who works with an NGO in the area.

India's urban unemployment soared during the COVID-19 pandemic, reaching a high of 20.9% in the April-June 2020 quarter, while wages fell. While the unemployment rate has fallen since, fewer full-time jobs are available.

Economists say more and more job-seekers, especially the young, are looking for low-paid casual work or falling back on unreliable self-employment, even though the broader Indian economy is seen growing at a world-beating 6.5% in the financial year ending in March 2024.

In 2022/23, the Indian economy grew a stronger-than-expected 7.2%, boosted by the government's capital investments. But private consumption, which forms 60% of India's GDP, grew between 2-3% in the second half of the year, as pent-up spending and base effects faded.


India is overtaking China to become the world's most populous nation with more than 1.4 billion people. Nearly 53% are under 30, its much-touted demographic dividend, but without jobs, tens of millions of young people are becoming a drag on the economy.

"Unemployment is only the tip of the iceberg. What remains hidden beneath is the serious crisis of underemployment and disguised unemployment," said Radhicka Kapoor, fellow at economic research agency ICRIER.

Khan, for instance, offers himself as casual labour for home repairs or construction, earning just about 10,000 Indian rupees ($122) a month to help support his father and his four sisters. "If I get a permanent job, then there will be no problem," he says.

The risk for India is a vicious cycle for the economy. Falling employment and earnings undermine India’s chances to fuel the economic growth needed to create jobs for its young and growing population.

Economist Jayati Ghosh calls the country's demographic dividend "a ticking time-bomb."

"The fact that we have so many people who have been educated, have spent a lot of their own or family's money but are not being able to find the jobs they need, that's horrifying," she said.

"It's not just the question of potential loss to the economy ... it is a lost generation."


Unemployment is far more acute in India's cities, where the cost of living is high and there is no back-up in the form of a jobs guarantee programme which the government offers in rural areas. Still, many in the army of rural unemployed flock to the cities to find jobs.

While urban unemployment was at 6.8% in the January-March quarter, the share of urban workers with full-time jobs has declined to 48.9% as of December 2022 from an already low 50.5% just before the start of the pandemic, government data show.

This means that of the estimated urban workforce of about 150 million, only 73 million have full-time jobs.

For people in urban areas with full-time jobs, average monthly wages, adjusted for inflation, stood at 17,507 rupees ($212) in the April-June 2022 quarter - the latest period for which government data is available.

This was a modest 1.2% higher than the October-December 2019 period, before the start of the pandemic.

But for the self-employed, incomes fell to 14,762 ($178.67) rupees in the April-June 2022 quarter, according to research by Ghosh and C.P. Chandrashekhar, both at the University of Massachusetts, Amherst. The figure was at 15,247 rupees in the October-December 2019 quarter.

"The big thing that has happened is the collapse of small businesses, which were the backbone of employment," said Ghosh.

Since the Indian government's decision to demonetise 86% of the country's currency in circulation in 2016, there have seen continuous attacks on the viability of small business, with the pandemic being the latest, she said.

Over 10,000 micro, small and medium enterprises shut in 2022-23 (April-March) alone, the government said in parliament in February. In the previous year, more than 6,000 such units had shut. The government did not specify whether any new enterprises were set up in those periods.


Many families in Khan's neighbourhood, typical of the urban sprawl in the city of 21 million, have been hit by job losses and lower incomes in recent years. Young workers are particularly vulnerable.

Arshad Ali Ansari, a 22-year-old student, said he saw his brother and sister lose their jobs soon after the start of the pandemic.

Sitting in a single room with a kitchen attached, where his family of eight lives, Ansari said they survive on his 60-year old father's earnings of about 20,000 rupees a month.

His brother, who was a graduate and had worked in a bank, lost his job during the pandemic and had to join their father in painting houses.

"My brother had education, he had experience," Ansari said.

His sister, once a social worker, also lost her job and has given up hope of finding another.

India will need to create 70 million new jobs over the next 10 years, wrote Pranjul Bhandari, chief India economist at HSBC, in a note earlier this month. But only 24 million will likely be created, leaving behind "46 million missing jobs."

"From that lens, a growth rate of 6.5% will solve a third of India’s jobs problem," Bhandari wrote.