Ban on luxury imports holds up 1,000 containers at seaports

KARACHI: The government’s ban on luxury imports has amassed around 1,000 shipping containers loaded with embargoed goods at the seaports of the country, costing importers heavily in demurrage, a country’s top trade body said on Thursday.

In a bid to shore up its wobbly economy, Pakistan banned the import of all non-essential luxury goods on May 19, 2022, citing economic emergency.

The country’s current account deficit clocked in at $1.425 billion in May 2022, compared to $640 million recorded in the same period of the previous year amid a thin cover of foreign exchange reserves and a record low rupee.

“Importers were not aware that the ban would take effect from May 19,” said Irfan Iqbal Sheikh, President Federation of Pakistan Chambers of Commerce & Industry (FPCCI) in a statement.

“Now importers were forced to pay $120/container demurrage charges to the shipping companies on a daily basis.”

He said that the demurrage charges would also weigh on the foreign exchange reserves of the country.

“If a relief is not provided to the importers, who had ordered these goods prior to the ban imposed through SRO 598, they will suffer huge losses,” Sheikh said.

Shabbir Mansha, Vice President FPCCI, while talking to The News they were the biggest proponents of a ban on luxury items.

“We are not against the ban in view of depleting forex reserves,” he said.

However, he pointed out that orders placed before May 19, 2022 and the consignments shipped under these orders after this ban should not be treated under this SRO as it had been causing losses to the importers.

“The FPCCI has contacted the government about the issue to resolve the problems of the importers,” Mansha said, adding they had received positive signals from the government for the resolution of this issue.

According to the FPCCI official, the trade body wants the affected importers be given the relief till Thursday June 30, 2022 in order to clear their containers, which were booked before May 19 and were shipped to Pakistan after that.

“The containers have been stuck for only carrying twenty items of a particular banned product, whereas hundreds of other items have been held unfairly.”

The importers were forced to pay detention charges to the shipping lines for their stuck containers in dollars, adding to the cost of imported goods.

He said there were chances these containers would be released in the next one to two weeks, but not without dealing massive losses to importers, who should be compensated by the government.