Impact of ban on import : Gold exports drop by a massive 80% in 2mth of FY14
By Abrar Hamza (source: www.dailytimes.com.pk)
KARACHI: The export of jewellery declined tremendously by 79.72 percent to $59,188 in the first two months of the current fiscal year 2013-14 (FY14) as against the export $32,932 in the parallel period of last fiscal year primarily due to ban on import of gold.
However, the precious stones exports jumped by 18 percent in the first two months of FY14 to $659,000 or 2.0 tonnes as compared to the value of $560,000 or 1.0 tonne in the same period of FY13, according to the latest figures released by Pakistan Bureau of Statistics (PBS) on Thursday.
The industry experts attributed this hefty decline to temporarily one month ban on the import of gold imposed by the new government on July 30, 2013 aimed to save its foreign currency reserves and to curtail the rampant smuggling going on in the nation.
Though the government has removed the ban on imports of gold recently, but the curb had translated into a robust drop in exports of jewelry as in this sector the export and import are directly connected with each other since the export of gold ornaments or jewellery is realised by repatriating gold pieces.
All Pakistan Jewellers and Manufacturers Welfare Association’s Chairman Muhammad Arshad while talking to Daily Times said, “The bizarre decision of the government had bode adversely for the sector as numbers of export orders have been cancelled or delayed and numerous craftsmen have become jobless due to that. When the gold sector of the country is already crawling due to immense hike in precious metal prices for last couple of years such decisions are unhelpful for the sector.
He was of the view that the decision had proved fruitless as it did not serve its purpose to stop depreciation of the rupee against the dollar, although ban on import has been hoisted but it will take three to four months to revitalise the gold export like before, he added.
The government of Pakistan, following the Indian government’s decision to discourage gold import by imposing 8.0 percent duties had imposed ban for one month on import of gold.
It is worth mentioning here that during the last FY13, the export of only jewellery was $4.57 million. The industry players also rejected the revised scheme for import of gold saying stakeholders should have consulted before implementing the new scheme.
On yearly basis the jewellery exports fell by 69 percent to $43,154 in the month of August 2013 as compared to previous August’s exports of $139,678. However, realisation of preceding orders supported the exports of gold during August 2013 as it witnessed exorbitant increase of 169 percent when compared to the export value of $16,034 in the month of July 2013.
According to the new scheme, no more than 50 percent of export proceeds will be realised in the form of gold. Resultantly at least 50 percent will need to be repatriated in foreign exchange through normal banking channels.
Some other salient features of the new scheme are; the quantity of gold importable by a single party will be capped at 25kg on revolving basis, a beneficiary is obligated to export the imported gold in the form of value-added gold jewellery within 120 days, it will now be mandatory to have a contract notarised from the foreign country’s legal authorities and then the same would also need to be duly attested by the relevant Pakistan missions abroad and random testing of jewellery export consignments will be done at airports to ensure that they are fully in conformity with the declaration made to the customs.
KARACHI: The export of jewellery declined tremendously by 79.72 percent to $59,188 in the first two months of the current fiscal year 2013-14 (FY14) as against the export $32,932 in the parallel period of last fiscal year primarily due to ban on import of gold.
However, the precious stones exports jumped by 18 percent in the first two months of FY14 to $659,000 or 2.0 tonnes as compared to the value of $560,000 or 1.0 tonne in the same period of FY13, according to the latest figures released by Pakistan Bureau of Statistics (PBS) on Thursday.
The industry experts attributed this hefty decline to temporarily one month ban on the import of gold imposed by the new government on July 30, 2013 aimed to save its foreign currency reserves and to curtail the rampant smuggling going on in the nation.
Though the government has removed the ban on imports of gold recently, but the curb had translated into a robust drop in exports of jewelry as in this sector the export and import are directly connected with each other since the export of gold ornaments or jewellery is realised by repatriating gold pieces.
All Pakistan Jewellers and Manufacturers Welfare Association’s Chairman Muhammad Arshad while talking to Daily Times said, “The bizarre decision of the government had bode adversely for the sector as numbers of export orders have been cancelled or delayed and numerous craftsmen have become jobless due to that. When the gold sector of the country is already crawling due to immense hike in precious metal prices for last couple of years such decisions are unhelpful for the sector.
He was of the view that the decision had proved fruitless as it did not serve its purpose to stop depreciation of the rupee against the dollar, although ban on import has been hoisted but it will take three to four months to revitalise the gold export like before, he added.
The government of Pakistan, following the Indian government’s decision to discourage gold import by imposing 8.0 percent duties had imposed ban for one month on import of gold.
It is worth mentioning here that during the last FY13, the export of only jewellery was $4.57 million. The industry players also rejected the revised scheme for import of gold saying stakeholders should have consulted before implementing the new scheme.
On yearly basis the jewellery exports fell by 69 percent to $43,154 in the month of August 2013 as compared to previous August’s exports of $139,678. However, realisation of preceding orders supported the exports of gold during August 2013 as it witnessed exorbitant increase of 169 percent when compared to the export value of $16,034 in the month of July 2013.
According to the new scheme, no more than 50 percent of export proceeds will be realised in the form of gold. Resultantly at least 50 percent will need to be repatriated in foreign exchange through normal banking channels.
Some other salient features of the new scheme are; the quantity of gold importable by a single party will be capped at 25kg on revolving basis, a beneficiary is obligated to export the imported gold in the form of value-added gold jewellery within 120 days, it will now be mandatory to have a contract notarised from the foreign country’s legal authorities and then the same would also need to be duly attested by the relevant Pakistan missions abroad and random testing of jewellery export consignments will be done at airports to ensure that they are fully in conformity with the declaration made to the customs.
