Pakistan. First half rice exports down 18 percent, exporters seek relief

27.01.2017

The country's rice exports declined by 18 percent during the first half of this fiscal year (FY17), mainly due to stiff competition in the world market. As the exports of the country's second largest foreign exchange earner commodity are on the decline, exporters are seeking some relief in terms of 2-5 percent rebate from the federal government to compete in the world market.

According to Pakistan Statistics Bureau (PBS), overall rice exports (basmati and non-basmati) declined by 18 percent in July-December of this fiscal year. The country exported rice worth $713 million in first half of FY17 compared to $869 million in the corresponding period of last fiscal year (FY16), depicting a decrease of $156 million.

During the period under review, exports of basmati and non-basmati rice declined by 25 and 15 percent, respectively. Pakistan's basmati rice exports stood at $170.343 million during July-December of FY17 compared to $229 million in the same period of last fiscal year. Similarly, exports of non-basmati rice declined by $98 million to $542.647 million in the first half of this fiscal year.

"After touching $2 billion mark, the country's second largest foreign exchange earner commodity, ie, rice exports are on the decline for last two years and need the government attention to survive in the world market," said Mahmood Moulvi, Chairman, Rice Exports Association of Pakistan (REAP).

He said this year remained very challenging for rice trade due to lower prices and rising competition in the world market. Moulvi said despite lower commodity prices in the domestic market, exporters are unable to compete with India, which is offering the same verity at lower price compared to Pakistan.

"Presently, India is our major competitor in the international market and gradually capturing Pakistani share," he added. Pakistan's non-basmati rice is being traded at about $390 per ton in the international market, while India is offering the same variety at $360 per ton. In addition, Pakistan's basmati rice is also costly by some $100 per ton in the international market as Pakistani basmati rice's average price stands at $1,050 per ton compared to $950 per ton being offered by Indian traders, he maintained.

"The federal government should realise that exports of major foreign exchange earning commodity are on the decline and need a immediate relief package like that of textile sector to overcome the current crisis and maintain its share in the world exports," he added. He suggested that 2-5 percent rebate scheme for the rice traders on higher exports.

He said actually, the government has given the relief package to textile, leather, surgical and other sectors for no devaluation of Pak rupee. Therefore, we are requesting the same package for rice.

Moulvi said Iran is a major market for Pakistan, however, despite lifting of international sanctions, Pakistani exporters are still unable to initiate official export to the neighbouring country in the absence of banking channel.

He said Indian exporters are gradually capturing Pakistani rice markets and presently Pakistan's share in Saudi Arabia's market has declined to 20 percent from 70 percent, while Indian share has surged to 75 percent.

Rice exports have not only been declined in terms of value but also decreased in terms of quantity. Overall, some 1.697 million tons of rice (basmati and non-basmati) was exported during the first half of current fiscal year against 1.96 million tons in the same period of last fiscal year. Month-on-month basis, the country's total rice exports fell by 14 percent during December 2016 compared to November 2016. During December 2016, Pakistan exported rice (basmati and non-basmati) amounting to $155.474 million compared to $166 million in Sep 2016.


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