PESHAWAR, March 9: The introduction of regulatory duty on the export of flour to Afghanistan coupled with closure of some of the busiest trade routes because of heavy snow have slowed trade activities in Peshawar's flour markets , according to official and business sources.

"The number of trucks crossing over to Afghanistan, every day, from Torkham border check post has declined considerably since the regulatory duty was imposed in December," an official of the Central Board of Revenue (CBR) told Dawn.

However, a leading flour trader of Peshawar said that suspension of vehicular traffic on some of the roads inside Afghanistan was equally responsible for the recession in the local flour market.

"Regulatory duty has not much to do with the slowing down of trade and business activities in local markets, because the transportation of flour via untraditional routes through the Federally Administered Tribal Areas (Fata) has also declined and that is because of disruption of road network between Kabul and Mazaar-e-Sharif and in some other areas in Afghanistan," said a trader involved in exports of flour to Afghanistan.

The CBR officials said that presently between 15 and 20 trucks loaded with flour bags weighing 100 kg each were entering Afghanistan from the Torkham border check post every day, against 70 and 80 trailers some three months back," said a CBR official based in Torkham, some 55 km in the West of Peshawar.

The CBR, on December 17, had introduced 15 per cent regulatory duty on the export of flour to Afghanistan through its circular No 5(25)FP/2002. The move was aimed at controlling export of flour in huge quantity to Afghanistan.

The measure on the one hand helped control the export of flour to Afghanistan and resulted in stability in prices of the commodity in Peshawar's markets. On the other it had raised additional revenue, as, said the sources, the Torkham customs office alone raised about Rs90 million since its introduction on December 17.

Business circles in Peshawar said that the decline in export of flour to Afghanistan had also hit the transport business, daily wagers, flour mills and local dealers.

The Pakistan Flour Mills Association (PFMA), NWFP-chapter said the government's decision was in violation of an earlier decision of the Economic Coordination Committee of the federal cabinet, dated January 8, 2001. The PFMA, NWFP-chapter is of the view that the move was against the ECC's decision under which export of un-limited quantity of wheat and its products was allowed.

The association was quick in apprehending the situation and subsequent to the introduction of the regulatory duty its president Mohammed Naeem Butt raised the issue with the prime minister in a letter, dated January 17, which, according to sources, remains to be answered.

The president of PFMA, NWFP, said a spokesman for the association, had requested the prime minister to review the decision of imposing the regulatory duty as it had negatively impacted the exporters of NWFP.

"Introduction of regulatory duty on flour has created serious problems for the exporters who have invested huge amount in the export business in pursuance to the federal government's deregulation and free trade policy," contained the letter.

The PFMA has also brought the attention of the prime minister towards the implications the move might result in for the business community of NWFP who were likely to experience reduction in their share of flour market inside Afghanistan.

"The action has shaken the confidence of NWFP business community as the curb would lead to shrink their exports as a result exporters from other countries would find it easier to capture flour markets in Afghanistan," the PFMA-NWFP chairman maintained in his letter to the prime minister.