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Wednesday, 16 January, 2002, 16:08 GMT
Pressure eases on Pakistan traders
Bags of foodstuffs for Afghan refugees
Exports have become more competitive
Prices of Pakistan agricultural commodities are returning to normal, following the reduction of war risk insurance.

The cost of shipping goods in South Asia has fallen as ship owners have cut the war risk insurance levied on containers in the region.

This has in turn helped steady agriculture commodity prices, allowing traders to sell goods at more competitive prices, Pakistan's minister for food and agriculture Khair Mohammad Junejo said.

"The shipping situation in Pakistan is completely back to normal," the minister told Reuters news agency.

"Our ports are functioning normally. There are no extra charges on insurance. That has been sorted out," he said.

Dollar charges

The war risk premium translates into a dollar charge per container for textile and cotton exporters.

This price hit a high of $400 to $500.

"It went back down to $250 per container and it is expected to go down further," Muddassar Malik, director of BMA Capital, told the BBC's World Business Report.

"Prices in the commmodity markets domestically tend to follow the international commodity prices. In Pakistan recently they have been trading art a slightly higher level than the international commodity markets for all the major cash crops," he said.

Accounting for 26% of GDP, agriculture is a key part of the Pakistan economy, he said.

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BMA's Muddassar Malik
"Exports out of Pakistan have come under a certain amount of pressure"
See also:

14 Jan 02 | Business
Indian and Pakistani markets rally
09 Nov 01 | Business
Bleak outlook for Asian growth
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