Inflation is quite a complex topic to discuss, as it depends on who you are talking to. If you talk to a person who doesn’t have any idea of the economic situation around the world, and only has a political opinion, they would probably go with the common phrase’’ this is sole because of the current government ‘’. Though, it’s the right answer. Government policies have a great impact on inflation despite the international impacts.
Let’s discuss a few of the major reasons for Sky-rocketing inflation besides dollar-rupee parity which keeps rising.
If you are in the business community or trying to buy products that are imported you would have heard suppliers talking about the containers- oh excuse me, not talking about Imran Khan Container-the symbol of political change- or the one where he was shot down. Here we are talking about the containers having pulses, grains and many other commodities being stopped port-creating a dire shortage of these products.
It has nurtured inflation among the export-oriented industries due to lack of unavailability of raw materials stuck up at the port. A big reason for inflation in the country. Now the question is why all these containers are not being released.
All this happened due to a delay in the release of payments to the suppliers. It also brought a bad reputation for Pakistan. In the future, no supplier would be willing to deal with Pakistani importers as payments to suppliers delay for a longer period. Meanwhile, the foreign exchange reserves of the State Bank of Pakistan dropped to a dangerous level. According to official statistics, it dropped to $2.917 billion and the decline is due to scheduled external payments.
The situation is getting worse as Pakistan is trying hard to clear the containers through outside sources. Unfortunately, commercial banks are also creating unnecessary hindrances in payment. The containers have been in the port for the last three months. Which is creating a huge burden on the business community and importers.
In all these situations, the whole burden would be transferred to the buyers (public) adding to increased inflation.
Note: The term "stuck-up containers" typically refers to shipping containers that are not being allowed to be unloaded at their intended destination. This can happen for a variety of reasons, such as customs inspections, paperwork issues, or problems with the shipping company
The Negative Impact of Stuck-Up Containers on the Cost of Imported Consignments
The business community is expressing their frustration and concern about the delay, as it is affecting their ability to receive the goods that are being transported in the containers. The delay can result in increased costs, disrupted supply chains, and lost business opportunities.
Furthermore, delay in resolving the issue of stuck-up containers is having on the cost of imported consignments. Due to the delays, the cost of imported goods has increased significantly as a result of extra demurrage and detention charges. These charges are fees that are imposed on shipments that are held up or delayed for longer than the agreed-upon time frame.
The cost of these extra charges has become so high in many cases that they have surpassed the actual value of the goods inside the containers, making it uneconomical for importers to clear the consignments. This is causing a significant financial burden for the business community, and ultimately leading to inflation in the country.
No comments:
Post a Comment