The race for rice exports

Exports of rice have decreased by 15 per cent, during July-May 2010-11, due to last year’s devastating floods and increasing price of rice in the international market. However, Basmati exports have shown a growth of 7 per cent as compared to the same period last year. The total rice exports of Pakistan in the year 2009 stood at 3.2 million tonnes.
Basmati rice has shown meager growth in export that reached 1.01 million tonnes in 11 months of 2010-11 as against to 0.943 million tonnes exported during the same period in the last year. Its export earned about $860 million as compared to $784 million. Out of the total rice exports, Basmati rice contributed 1.2 million tonnes and non-Basmati rice had a share of 2.6 million tonnes.
The price of Basmati has increased to $850 per tonne as compared to $831 per tonne of last year. The price of non Basmati rice has also risen from $424 per tonne in 2010 to $462 per tonne this year. The export of non Basmati rice fetched $1.11 million as against $1.2 million in the same period last year. In terms of value, export of rice has shown improvement as its price in the international market has increased.
Pakistani rice exporters were expecting to export about 4 million tonnes in 2010-11 as compared to 4.6 million tonnes exported in the year 2010.
Enhanced exports
So far 3.8 million tonnes of rice has been exported and has fetched $2.1 billion. It was hoped that rice export would reach 4 million tonnes and may bring $2.5 billion for the exchequer. The export was 2.829 million tonnes in the same period of last year. The rice export season remained at peak from October to May while in August and September the overall rice export decreased.
Reduction in export quantity was also affected due to Iran’s increase in duty on the import of Pakistani rice that dropped to 37.5 per cent during 2009-10 as compared to the previous year. Annual rice import of Iran is 0.8 to 1 million metric tonnes, mainly imported from Pakistan, India, Vietnam and Uruguay. Basmati and Sela were imported from Pakistan. Out of total rice exports, 8 per cent are to Iran.
After Thailand, Vietnam and the US, Pakistan was the fourth largest exporter of rice in the world in 2009. Pakistan is producing rice in excess to local demand and that allows exports to international markets. The other reason that supported Pakistan in enhancing its exports was the decision of major rice producing countries like India and China to restrict their exports for meeting their huge domestic demand. The rice exports sector established itself as the second largest export earner of the country in agricultural products. Rice export shows a 260 per cent growth in value terms over the last six years or an annual growth rate of 25 per cent since 2002-03.
Impact of floods
Floods damaged a vast area of Punjab, Sindh and Khyber Pakhtunkhwa provinces. The overall production of rice was expected to reduce by approximately 20 per cent. Basmati rice is mainly grown in Punjab. The Japonica type of rice is grown in Swat, KP. IRRI 6 and 9 rice is grown in other areas of the northwestern Khyber Pakhtunkhwa and the southern provinces of Sindh and Balochistan. Rice is the most widely consumed staple food in the world and is an excellent source of compound carbohydrates. Pakistan is the 11th largest producer of rice and tha 4th largest rice exporter. Pakistan produced 6.88 million tonnes of rice over an area of around 3 million hectares in 2009-10.
In agricultural products, rice exports remained the second largest foreign exchange earner for the country, after cotton. Sindh produces about 1.461 million tonnes of rice from an area of 0.544 million hectares with an average yield of 2.686 tonnes per hectare. The main varieties of rice grown in Sindh are Basmati, IRRI-6 and IRRI-9. The fine type variety has different names in Sindh such as Roosi, GM Basmati, Kernel, Supper, Dubai or Basmati-2000 and D-98 Basmati. Rice from Sindh, is also known to the world as ‘Sindhi Basmati’.
Pakistan produces 6 to 7 million tonnes of rice annually, of which Punjab’s share is 4 million tonnes. However, if the agriculture department becomes active and shifts research work to fields from urban centres, ensuring availability of agricultural inputs to farmers at reasonable prices, rice production of the province could be enhanced to 5.5 to 6 million tonnes. It was claimed that Punjab alone can export $5 billion worth of rice per annum if proper measures are taken by the agriculture department.
Essential to improve per acre yield
An increase in per acre yield, which has remained static for the last 5 years, and improvement in quality of rice would help to earn better prices in the international market. These steps would help in earning $5 billion per annum.
Growers said that rice production in Punjab may increase from 4 to 6 million tonnes as the area under the crop has increased by one million acres. The overall rice production area in Punjab was 4 million acres that has now increased by 1 million acres due to the high price of rice in the international market. Farmers were paid good prices by exporters that encouraged growers to increase cultivation of the crop. The price of rice in international market reached $520 per tonne while it was $465 per tonne during last year. Recent rains in Punjab would help in increasing rice production. There are about 100,000 to 150,000 tube wells in Punjab, which are not being used by farmers due to long hours of load shedding. But rains have compensated this shortage to some extent. Per acre yield of rice in Pakistan is 23 maunds while in China and India, the yield is 40 to 50 maunds per acre. By increasing per acre yield, Pakistan can earn an additional amount of $6 to $7 billion. For value addition, Pakistani rice exporters can purchase machines from India and also learn from Indian expertise and research in the field of rice. Rice exporters have already expressed their interest in buying machines from India for extracting bran oil and trigger value addition locally. Rice is the most important staple food for a large part of world population. According to FAO Statistics of 2006, rice is the grain with the second highest worldwide production, after maize. Its annual production worldwide is about 535 million tonnes. Fifty countries produce rice, with China and India supporting 50 percent of total production. Southeast Asian countries separately support an annual production rate of 23 million metric tonnes of which they export very little.
Parboiled rice-a potential investment
Sindh produces about 30 per cent of total rice production in Pakistan and is the main producer of non-basmati rice. Non-Basmati varieties of Sindh, namely IRRI-6 and IRRI-9 are in great demand internationally mainly in Africa and Far East Asia. Rice processing facility of producing parboil rice may be a good viable agribusiness venture. Therefore, setting parboil rice processing units have the potential for investment.
Parboiled rice is the rice that has been boiled in husk. Parboiling makes rice easier to process by hand, improves its nutritional profile, and changing its texture. Polishing rice by hand, that is, removing the bran layer is easier if the rice has been parboiled. However, it is more difficult to process mechanically. The bran of parboiled rice is oily and tends to clog machinery. Most parboiled rice is milled in the same way as white rice.
Parboiling rice drives nutrients, especially thiamine, from the bran into the grain, so that parboiled white rice is 80 per cent nutritionally similar to brown rice. Because of this, parboiling was adopted by North American rice growers in the early 20th century.
The starches in parboiled rice become gelatinised, making it harder and glassier than other rice. This rice takes more time to cook and the cooked rice is firmer and less sticky. In North America, parboiled rice is generally, partially or fully precooked by the processor.
Parboiling is a hydrothermal treatment of paddy, i.e. parboiling means precooking of rice within the husk. Paddy is first hydrated, then heated to cook the rice and finally dried.
Africa is the major rice importer of the world with a total import of 1.4 million tonnes per annum. IRRI-6 rice from Sindh is exported to African countries. Pakistan exports 80 per cent super basmati rice to the European Union. The average price of IRRI-6 is Rs32,000 per tonne in the domestic market and the export price is $625 per metric tonne. The export price of parboiled rice is $1,150 per metric tonne.
Exploring new markets
The global condition is that major rice consuming countries are building their rice stocks and Pakistan has a good opportunity to enhance its rice export. Rice Export Association of Pakistan (REAP) is optimistic that export of the commodity would exceed $3 billion by 2013. China, one of the world’s biggest rice markets can be exploited by aggressive marketing. Another potential market is South Africa where Pakistan has paltry share of only 3 per cent out of a total market of 10 million tonnes. Iran is another market for rice which must be exploited. Russia also imports 700,000 tonnes rice annually and Pakistani rice has a lot of potential for exports to this country. To encourage agricultural scientists, better pay packages and service structures should be instilled, so that research work on rice for improving their quality and per acre yield could be carried out.