Industry voices concern over rising freight and war risk charges amid US-Israel conflict with Iran

KARACHI: Industry stakeholders have raised concerns regarding the impact of increased freight and war risk charges on Pakistan's trade outlook, following the recent escalation of conflict involving the US, Israel, and Iran.

While some industry representatives believe that there is no immediate threat of raw material shortages due to sufficient inventories, they warn that the surge in freight costs and war risk premiums could pose significant challenges for future trade activities. According to commodity traders, a number of their members have temporarily halted import and export operations until the situation stabilises and freight and war risk premiums return to normal levels.

Tauqeer-ul-Haq, President of the Pakistan Pharmaceutical Manufacturers Association (PPMA), stated that the pharmaceutical sector is not currently facing any major supply disruptions. He explained that most raw materials for pharmaceuticals are sourced from China, and the industry typically maintains inventories that last five to six months. "There is no serious supply disruption as most of our raw materials are imported from China," he said, adding that the sector usually keeps sufficient stock to cover several months of production needs.

Jawed Bilwani, a representative of the value-added textile sector and former chairman of the Pakistan Hosiery Manufacturers Association (PHMA), also commented on the situation. He noted that while there is no immediate shortage of raw materials, the increased costs associated with freight and war risk insurance are a cause for concern and could impact the sector's competitiveness in the international market.

Industry voices remain divided on the potential risks, with some maintaining that current inventories provide a buffer against immediate disruptions, while others highlight the uncertainty and financial strain caused by the ongoing conflict and its effects on global shipping routes.

The evolving situation continues to be monitored closely by businesses and trade associations, as they assess the potential long-term implications for Pakistan's import and export activities.