Egyptian rules creating hurdles for SME exporters

KARACHI: The Pakistani Small and Medium Enterprises (SME) exporters to Egypt are facing various issues due to the abrupt change in import and payment rules which now only allows imports under letter of credits, an official said.

The Union of Small and Medium Enterprises (Unisame) has received request from the SME exporters to Egypt to take up the matter with the apex chamber of commerce and industry in Egypt to convince the Egyptian central bank to accommodate the cargo already shipped and either in transit or having reached the destination ports in Egypt.

Unisame President Zulfikar Thaver said that the SME exporters who have already shipped the goods or who have signed contracts for prompt shipments and made bookings on vessels for shipments in April, May 2022 are in real jeopardy.

It is believed that the Egyptian banks are not establishing letter of credits (LC) in favour of overseas exporters promptly but taking almost 45 days to establish the LC.

He also raised concerns on how the Egyptian banks will be able to accommodate the goods already shipped under an LC not yet opened, as the documents will indicate the shipment date before the opening date of the LC whenever opened.

Zeeshan Nazim, convener of herbs, roots and commodities export of Unisame has written to the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) president to urgently take up the issue with the Egyptian counterpart.

He urged the FPCCI to request the Egyptian authorities to convince the Egyptian central bank to accommodate the earlier contracts under which shipments have already been made and cargo is lying at destination ports in Egypt or in transit in the exporting country and the contracts, the advance payment for which has been made.

Hussain Ali Ratnani logistics convener of Unisame lamented that those SME exporters who booked their cargo on scheduled vessels and have to cancel their shipments due to LC conditions will have to face penalties for non-shipment and cancellation of container space due to non-shipment or delayed shipment as the Egyptian banks are taking 45 days to establish LCs in favour of the exporters.

The Unisame Council members said that it is a sad state of affairs and the SME exporters are in real turmoil and have urged the State Bank of Pakistan (SBP) to examine the situation and advise the Egyptian central bank to take remedial measures to accommodate the badly affected Pakistani exporters.