The Islamabad Chamber of Commerce and Industry (ICCI) has expressed concern over the reports that commercial banks resisted the opening of letters of credit (LCs) of edible oil importers-cum-manufacturers, WealthPK reports. ICCI said that it would create a shortage of ghee and cooking oil in the market and cause a further hike in the prices of those commodities.

In a statement, Faad Waheed, the acting president of ICCI, said that the State Bank of Pakistan allowed imports related to essential sectors, such as food including wheat and edible oil, which was warmly welcomed by the business community. However, he said that commercial banks now informed the importers-cum-manufacturers that edible oil was excluded with immediate effect from the list of essential imports. He added banks turned down their requests for the opening of LCs.

“It is creating a panic-like situation in the market,” said Faad Waheed. He added that almost 90% of edible oil in the country was produced from imported oil seeds to meet the national needs of more than 4.5 million metric tonnes per annum. The existing domestic stocks can hardly meet the need of three to four weeks. It is essential to ensure the opening of LCs to avoid any shortage of this essential food item in the market.

He said that the cooking oil industry was facing a unique kind of challenge as despite the discharge of sufficient stocks in custom-bonded warehouses in Karachi, the importers-cum-manufacturers were unable to lift the stock due to the refusal by banks to retire the documents.

“This state of affairs is giving rise to negative market sentiments and drying up the supply chain of staple food products of ghee and cooking oil,” said Faad Waheed. He urged SBP to immediately issue a clarification on the matter and direct commercial banks to honour the LCs of the edible oil sector to save the public from further inflation and business community from further losses, according to the statement received by WealthPK.

Credit : Independent News Pakistan-WealthPk