Saturday, May 3, 2008

India to blame for rising farm goods prices in Pak

POTATO prices in Pakistan have trebled in the last two months and Islamabad is blaming India for this. New Delhi is being held responsible for the rise in the prices of onion, tomato and garlic also.

The reason for Islamabad blaming New Delhi for the rise in at least five commodities is that the latter hasn't allowed exports of these goods across the border.

In May this year, Pakistan, fearing shortage of some commodities, allowed annual import of livestock up to 10 lakh, besides unlimited quantities of onion, potato, garlic and tomato from India.

However, except for a couple of hundreds of cattle, no other commodity has been exported to Pakistan so far. This was allowed entry across the border only after being quarantined.

The problem for Islamabad is that potato prices are currently ruling at Pakistani Rs 40-45 (PKR) a kg (Indian Rs 29.10-32.80), while garlic is being quoted at PKR 90-100 a kg (Rs 65.50-72.75). Two months ago, potato prices were PKR 15 and garlic PKR 40.

Meat prices are hovering around PKR 195 (Rs 141.85) a kg.

Media reports from Pakistan, quoting officials there, say India is trying to bargain for exporting these items.

According to them, New Delhi is asking Islamabad to allow transit access for its goods to Afghanistan by land route.

But Indian officials deny this. "The Afghanistan issue is an old and ongoing one. There is no relation between these two," an official, who did not wish to be identified, said.

"The Department of Revenue has now notified that exports can take place through the land route to Pakistan. But exporters are yet to approach (to send consignments to Pakistan)," the official said.

The problem of transit access for Indian goods by land route to Afghanistan dates back to 2000.

Then, India had wanted to send wheat to Afghanistan as food aid. But Pakistan refused transit access through land route, saying Indian wheat had presence of Karnal bunt and it could affect its crop.

India then had to mill the wheat and turn the flour into biscuits before sending it to Afghanistan.

As regards the five commodities to be exported to Pakistan, the official said they were already in the active trade list and there should be no problem.

Trade sources say currently, onion exports could be a problem since it is off-season and fresh arrivals are expected only in October.

Besides these commodities, Pakistan has also plans to import wheat and sugar.

In the case of sugar, Islamabad has said it will not source the commodity from New Delhi.

source:http://www.thehindubusinessline.com

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