Pakistan faces $1.5m monthly loss in meat exports to UAE due to unacknowledged freight charges
Despite the spike in air freight costs, certain exporters continued to export meat at the previously fixed rate of $3.9/kg in March 2023, when freight was even lower at $713/ton.
Pakistan is reportedly incurring a monthly loss of $1.5 million in meat exports to the United Arab Emirates (UAE) due to the non-inclusion of actual freight charges.
The Customs Intelligence, Karachi, has brought this issue to the attention of relevant customs authorities.
Sources reveal that the Customs Intelligence agency has communicated the matter through a letter to the Collectors of Customs at Jinnah International Airport, Allama Iqbal International Airport, and Benazir Bhutto International Airport in Islamabad. The concern revolves around the absence of actual freight charges in the export of meat to the UAE.
Details indicate that the Minimum Export Price, established by the All Pakistan Meat Exporters and Processors Association, incorporates the value of meat along with height charges. Remittances against meat exports are currently received in the country based on the C&F value.
The situation escalated after the Dubai government imposed a ban on the sea export of meat from Pakistan, effective from October 10, 2023. With increased demand for transporting meat from Pakistan to Dubai, air freight costs rose significantly.
The air freight, which was $766/ton in October 2023 for Emirates, the major carrier of meat from Karachi to Dubai, surged to $1187/ton in December 2023, marking a 55% increase.
Despite the spike in air freight costs, certain exporters continued to export meat at the previously fixed rate of $3.9/kg in March 2023, when freight was even lower at $713/ton. The unaccounted 55% increase in freight costs is resulting in a monthly loss of $1.5 million in foreign exchange for the country.
Approximately 3,575 tons of meat are exported monthly from Pakistan to Dubai. To address this issue, the Customs Intelligence Directorate suggests developing a mechanism to ensure that the actual freight paid by exporters is included when declaring the C&F value of exported meat.