Pakistan. September rice exports down 29 percent YoY

24.10.2016

Pakistan is losing rice market due to lack of research and non-availability of new seeds. These factors have resulted in a massive 29 percent decline in rice exports during September 2016. Rice export trade is the second largest foreign exchange earner, ie, some $2 billion annually. However, during last two years, rice export trade is facing severe crisis and exports falling down.

Exporters said current year will also be challenging and rice exports may further decline, if the government fails to take appropriate measures. According to exports statistics released by Rice Exports Association of Pakistan (REAP), Pakistan''s overall rice exports (in terms of quantity), posted a 29 percent decline in September 2016 compared to September 2015. The country exported some 181,350 tons of rice (Basmati and Non-Basmati) during September 2016 against 254,458 tons in September 2015, showing a decline of 72,108 tons. Non-basmati exports stood at 152,735 tons, down 25 percent in September 2016 compared to September 2015.

Commenting on lower exports, Mahmood Moulvi, Chairman of REAP said non-Basmati export''s decline is a matter of concern. "In my opinion a decrease in non-Basmati exports is due to China''s less import of non-Basmati rice due to higher domestic prices. Pakistan rice is costly due to high input cost, overvalued currency and excessive taxes," he added. He said non-Basmati sector might suffer this year on less import by China (Cambodia & Myanmar may emerge as main Chinese supplier). Although, Vietnam and Thailand may not be able to compete with Pakistan, however India is a major threat to Pakistan''s non-Basmati rice exports.

In addition, Basmati rice exports have been facing stiff competition from India. Lack of research and non-availability of new seeds has caused low yields, chairman REAP said. "High input costs have rendered Basmati rice totally uncompetitive against Indian variety. Along with this, Pakistan lost important and lucrative Basmati market of Iran as banks are not willing to accept documents for shipment to Iran," he maintained. India on the other hand kept supplying Basmati rice during the period of sanction against ''Oil for Food'' payments, he added.

Moulvi said REAP has made efforts to strike a barter deal with Iran against electricity funds lying with the government of Pakistan. He requested the State Bank to intervene and instruct commercial banks to accept documents allowing exporters to regain this lucrative and lost market. REAP has always raised its voice for all the stakeholders of rice and particularly for rice growers. Input cost of rice cultivation is very high as compared to our competitor countries. Other countries'' agriculture industries are heavily subsidised by their respective governments, he added.

The chairman REAP said lack of research and new seeds resulting in lower yields which is the main reason behind high input cost. The government should take immediate steps to increase the production of rice by providing farmers with new technologies/hybrid seeds, etc, he maintained.
 

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