Rice exports off to a flying start

09.10.2017
RICE exports have started the current fiscal year on a positive note, giving rise to hopes that the full-year proceeds will hit $2 billion after a gap of two years.
 
The country’s rice exports jumped 40 per cent year-on-year to $224 million in the July-August period, according to the Pakistan Bureau of Statistics.
 
Basmati rice exports rose more than 10pc to $63m during the two months despite a negligible increase in the volume, which rose 0.4pc to 59,433 tonnes.
 
Some exporters are re-establishing their brands by improving quality of processing and packaging while others are switching over from shipping large quantities of loose coarse rice to exporting it in wholesale or even retail packaging
 
However, exports of non-basmati varieties saw a big rise of about 47pc to 369,560 tonnes during the period. Accordingly, export earnings surged 57pc to $161m.
 
A rise in export earnings of basmati with negligible change in volume is both good and bad. It’s good as it points to a rising trend in per-unit price of basmati varieties. On the downside, higher per-unit price could give further edge to Indian exporters, who have already grabbed more than 70pc share of the Saudi rice market and are increasing their share in other Gulf Cooperation Council countries as well.
 
As for non-basmati or coarse rice varieties, their exports are growing for severalreasons, including higher production of rice in 2016-17 as compared to 2015-16.
 
Moreover, exporters are reaching out to new markets. Some of them are re-establishing their brands by improving quality of processing and packaging while others are switching over from shipping large quantities of loose coarse rice to exporting it in wholesale or even retail packaging.
 
Besides, the use of online trading portals for client searching is also picking up pace.
 
“Rice exports in this fiscal year can hit $2bn mark again (as they did in FY15),” says an official of the Trade Development Authority of Pakistan (TDAP).
 
Officials say that recent efforts to mobilise foreign missions in helping exporters grab a larger share of traditional rice markets and explore new ones have also started paying off.
 
In the last fiscal year, Pakistan produced 6.85m tonnes of rice, up from 6.8m tonnes in FY16 but still short of the 7m tonnes mark achieved in FY15. This has eased pressure to some extent on prices of exporters-driven purchases, and many of them are able to export more during this fiscal year than they did in the last year.
 
Exporters also hope to partly regain the lost ground in Saudi Arabia, where our rice exports declined to $54m in FY17 from $83m in FY16.
 
Some other exporters say that regaining our lost status in Afghanistan (where Pakistan’s rice exports slumped to $77.5m in FY17 from $128m a year ago) and China (where exports plunged to $105m in FY17 from a peak of around $277m a year ago) is crucial if we want to hit the $2bn mark in rice exports in FY18.
 
In case of Afghanistan, political tension between Islamabad and Kabul, and repeated closure of border trade are blamed by exporters for decline in exports of not only rice but of other commodities as well.
 
However, rice exports to China suffered last year mainly due to depressed demand there, though inefficient marketing and logistics issues also had a hand in it.
 
“In the last three months, we’ve received orders from both countries. I hope exports to Afghanistan and China will increase this year,” an official of the Rice Exporters Association of Pakistan (REAP) told this writer.
 
He said that during a recent visit of the Kenyan high commissioner to REAP’s headquarters, steps to further increase rice exports to Kenya came under discussion. Rice exports to Kenya rose to $198m in FY17 from $184m a year earlier.
 
During the previous fiscal year, Pakistani exporters penetrated into such non-traditional markets as Nigeria, Philippines, Sierra Leone, Somalia and Thailand, which itself is a big rice-exporting country. Combined earnings from these markets totalled about $80m, REAP officials say.
 
Besides, rice exporters are also making efforts to sustain markets like Kenya, Chile, Denmark, Djibouti, Haiti, Kazakhstan, Madagascar, Mauritania, Mauritius, Niger and Zimbabwe, where their exports saw phenomenal growth in FY17.
 
Pakistan’s rice exports to Indonesia got a boost in January last year when the two countries signed a deal to enable our exporters to ship $400m of rice in four years. “Under that agreement rice exports to Indonesia are going on and during this fiscal year we may fetch $50m to $100m depending upon Indonesian requirements,” says a TDAP official.
 
 

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