Containers carrying essential food items, raw materials, and medical equipment have been held up at Karachi port as the ongoing US dollar crisis hampers the economy.
Banks are refusing to issue new letters of credit (LCs) to importers as a result shipping containers containing lentils, pharmaceuticals, diagnostic equipment, and chemicals for manufacturing industries are stranded at the port awaiting payment guarantees, according to a report by AFP.
Chairman of All Pakistan Customs Agents Association (APCAA), Maqbool Ahmed Malik, said that he hasn’t seen such a situation in 40 years. He added that thousands of containers are stranded at the port due to a lack of dollars while operations were down by at least half.
Members of the Karachi Chamber of Commerce and Industry (KCCI) last week echoed similar issues of stranded consignments at shipping docks. Zubair Motiwala, chairman of the Businessmen Group which controls the KCCI, said the government has attempted to limit dollar outflows by limiting imports, including raw materials for industrial units. As a result, some manufacturing companies have either ceased operations or reduced their output.
“Shipments of grains, machinery, chemicals, and foodstuff are stuck. Shipping and port fees are mounting. In many cases, accumulated demurrage exceeds the cost of shipment,” he said.
The business group chairman criticized the central bank’s recent directive that prioritized import clearance for export-oriented industries below the food and energy sectors.
Dollars not available for essential items, but available for import of 100 luxury cars including Mercedes Benz. The priorities are clear.