In stiff competition with India, Pakistan’s export of rice has been declined by 10 per cent during July-November of the financial year 2011-2012. Tackling competititon: As India has reduced the export price of rice by almost Rs52, it has created 16 to 17 per cent difference in price in the international market for Pakistan. Islamabad has faced almost 10 per cent reduction in export of rice in terms of quantity, sources in Rice Export Association of Pakistan (REAP) told Profit. However, as the price of rice in the international market has already increased, especially for Basmati Rice, at least 5 per cent decline in rice exports in terms of value has been recorded in the last five months. Pakistan has exported the product worth $725 million by November and under the present pace of exports the country, it is likely to miss the target of 4 million tonnes in rice exports.
Impact of Indian rupee devaluation: Even though the country has a bumper crop this year, the record decline in export price of non-Basmati rice from India is creating tough competition for the country’s products in the international market. Besides the decline in price of the Indian commodity, the 15 per cent devaluation of its currency against the dollar in the last four months has also created problems for Pakistani rice, Taufiq Ahmed Khan, former Vice Chairman REAP. Rice exports were expected to be enhanced after the flood in Thailand -the biggest exporter of rice – however the ever declining export price of rice in Delhi is creating acute uncertainty in the international market. However, he claimed, the domestic market was stable.
Fall out of trade liberalisation: “This was the reason that the rice exporters here are fearful about the liberalised trade with India after granting it Most Favored Nation status,” he said adding that the exporters were still discussing the issue for submitting reply in the ministry of commerce about whether to include rice in the negative list or not. According to sources, the Indian government had reduced the minimum export price of non-basmati rice after exports failed to pick up. The government had allowed limited exports of non-basmati rice after a bumper crop in 2010-11. India had banned exports of rice, except the costly basmati variety, to beef up supplies in the domestic market and cool down soaring prices in April 2008. Presently, the increased domestic production and lower export of Basmati last year had resulted in abundant availability in the Indian domestic market. These factors brought down prices of this elite variety.
Power shortfall, crippling industry: Earlier, Pakistani export of rice declined to 0.862 million tonnes during the first four months (July-October) of this financial year, against 0.977 million tonnes in the corresponding period last year. The decline, despite of the challenge posted by India, was also due to the hours long power break downs which were affecting the business of almost 400 rice mills in both Punjab and Sindh. The present situation would also affect the over all exports of the country. It was estimated earlier that shipments from Pakistan may exceed 4 million tonnes with the production of 6.5 million tones; an increase of 38 per cent during 2011- 2012.