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The
events precipitated by the US-led
attack on Afghanistan to flush out
Osmana bin Laden and the Al-Quetta
movement following the terrorist
attack on US has created fluid
condition for Malaysia’s export
of palm oil to Pakistan. Though
exports are still being
transported, including by vessels
operated by the Malaysia
International Shipping Corporation
Bhd and Sutrajaya Shipping Sdn Bhd,
the declaration of the war zone
covering ports in Pakistan has
added considerable uncertainty to
the freight cost and landed prices
of the popular vegetable oil.
Pakistan
has responded to the tough
position taken by the
international marine insurance
market by offering its willingness
to underwrite the insurance risk
posed by the volatile condition
attributed by the insurers. The
Pakistani government had indicated
its willingness to guarantee port
safety to vessels and indemnify
insurance companies for not
levying war risk surcharge.
Nevertheless,
exporters of palm oil from
Malaysia still face the prospect
of having to pay for the war risk
surcharge that would be made known
to the shippers only 48 hours
before arrival of the vessel and
that too would be valid for only
seven days. In the event the port
stay of the vessel is longer than
seven days, the lines has to apply
for an extension and the shipper
would be responsible for any
additional charges incurred.
It
is thus encouraging that both the
Malaysia International Shipping
Corporation Bhd and the Felda-owned
Sutrajaya Shipping Sdn Bhd have
continued to transport palm oil to
Pakistan, which according to
industry sources imports an
average of 100,000 tonnes monthly.
Pakistan
is presently Malaysia's fourth
largest buyer of palm oil after
India, China and European Union.
Pakistan imported palm oil worth
more than RM1 billion or nearly 11
per cent of total palm oil exports
in the last year.
Unlike
palm oil shipment, a fixed war
risk surcharge for containerised
palm oil traffic has been imposed
the 16-member Informal Rate
Agreement liners operating between
Far East and Middle East. Shippers
were advised on the imposition of
a temporary additional risk
surcharge with effect from October
1, 2001. The risk surcharge to
Middle East ports including
Pakistan is US$150/TEU and
US$300/forty foot container.
Meanwhile the war risk surcharges
for ports in the Iraq is double at
US300/TEU and US$600/forty footer
container.
Meanwhile,
it is understood palm oil
exporters have briefed the
Ministry of Primary Industries
Minister on the problem and
another meeting is expected to be
held to find solutions, including
a government support programme.
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