Pakistan tries to prevent price-related chaos on the import market

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Pakistan is experiencing a major economical imbalance caused by the Corona virus pandemic. The country was suffering from issues even before due to depreciation of Rupee; now the situation has further deteriorated. Today 1 US-$ equals around 160 Rupees. As Fordaq experts anticipate, in a few months it can be as high as 200 Rupees.

These drastic changes have a huge impact on the import market. Softwood like spruce S4S has undergone a rapid price increase to about 400-500 US$/m3 - CFR Karachi, as well as Pine rough wood that has currently spiked to 250-300 US-$/m3 – CFR Karachi. Latvian sources are still a bit more affordable.

In order to balance prices, Pakistan has begun to focus more on local production and the importers are preferring Eastern European countries but they might soon become as expensive as their western competitors. The Fordaq experts have noticed that the anticipated, yet overall higher price is already being demanded of the customers. This is being done to safeguard the interests of the suppliers in relation to the fear of further Rupee depreciation. Moreover, in order to gain more flexibility in orders, different log dimensions than the usual are being imported as well.

The Pakistani market prefers to import logs with 30 cm+ diameter. Although this diameter is hard to get and logs below 30 cm diameter are readily available, price is too high for low diameter especially in relation to the higher waste and less production material. That is why 30 cm+ diameter logs are more in demand.

Hardwood logs like Ash and other premium species, for the production of plywood, are imported as well. While plywood imports from Malaysia and China become rare, the local plywood industry has taken over.

Due to the container scarcity a number of Pakistani companies have money pledged in the European market – suppliers are catering to demands and contracts of bigger importers and small scale importers are left to wait among the fears of Rupee depreciation impacts and availability of reliable shippers.

In order to support the companies the Pakistan Timber Industry Chamber is working to bring up a case to the government for removal or at least lowering of import taxes which are currently at 28% quite high. As the country is willing to invest into a green industry, times for changes like that might be promising.

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