SME EXPORTERS DEMAND TRANSPERENCY IN SRI LANKAN FTA FOR RICE QUOTA

The Union of Small and Medium Enterprises (UNISAME) has invited the attention of S.M. Munir chief executive officer (CEO) of Trade Development Authority of Pakistan (TDAP) to the favoritism in the quota system of rice in Sri Lankan Free Trade Agreement (FTA) which has deprived the SME exporters of their right to obtain a share in the 6000 metric tons annual quota and urged the CEO to ensure transparency and merit in allocation with fairness.

UNISAME stressed that the essence and spirit of the Sri Lankan FTA is to benefit the SME importers and exporters in both the countries and for this reason it did not invite tender bids for the quantity and infact evolved the system of quota to accommodate several SME exporters in Pakistan and several SME importers in Sri Lanka. It never intended one big exporter to export 2600 metric tons to Sri Lanka and on the other side one big importer to import 2600 metric tons in this manner and defeat the very purpose of the agreement.

President UNISAME Zulfikar Thaver said the union has received a complaint and pointed out that the requirement is that the cargo has to be on board the vessel to qualify for the quota on first come first served basis but unfortunately this system has not been observed and a big exporter was obliged in haste to accommodate the applicant who it is reported obtained the bill of lading (BL) from the shipping company.

The Rice Exporters Association of Pakistan (REAP) and TDAP evolved a joint policy that the quota would be issued only on presentation of BL and cargo shipped on board the vessel. The Quota would be posted on REAP’s Website and any shipper could check on website quota availability and then dispatch the goods for boarding on vessel and then reach back to TDAP officer for issuance of quota on presentation of BL
The purpose of such a policy was that our exporters could secure rates without quota and then could utilize the quota benefit afterwards so as to benefit in the transaction.

It has been observed that TDAP did not update the website and when an exporter goes with BL to TDAP, the exporter is informed that quota is already allotted and the website is not updated unfortunately. The TDAP then uses quota for their favoured exporters.

This year, REAP developed a new strategy with TDAP. The quota (6000 Tons) would be subdivided in 4 Quarters i.e. 1500 MTons each quarter. The TDAP will ask exporters to surrender their contracts with importers along with quantity and shipment schedule mentioned on quarterly basis. The Quota (1500 MTons each quarter) will be allotted on pro-rata basis to each applicant without any favor to provide fair access to every one.

Unfortunately all of a sudden, a big exporter dispatched 2600 MTons of rice to Karachi Port. The very next morning, TDAP issued in News Paper that the quota procedure is as usual on presentation of BL on first come first served basis rejecting REAP’s negotiation and setting aside REAP’s suggestions The big exporter presented a BL whose vessel had not departed and collected the BL in advance. The TDAP issued the quota to the big exporter for reasons best known to them.

It would be in the interest of all rice exporters if the matter is re-examined and decided accordingly and a proper system is developed with transparency and the system of first come first served is observed on merit.

Posted in: Press Releases