MFN regime to test rice exporters

As the cabinet has approved the negative list of trade of over 1,200 items with India, along with the phase out deadline of December 2012, the rice exporters of the country are going to hire foreign consultants/layers to avoid negative impacts of the trade liberalisation.
According to sources, rice exporters who perturbed over the ministry of commerce’s move to exclude rice from the proposed negative list and phase out of the list this year, have decided to prepare a comprehensive suggestion/proposal to the government to minimise the impacts of rice imports from New Delhi in post Most Favoured Nation (MFN) regime.
“Though this was the duty of the government to evaluate/examine the impacts of trade liberalisation with India after over 60 years, the exporters were doing the job by themselves to save the domestic market,” an official of Rice Exporters Association of Pakistan (REAP)who did not want to be named, told Profit.
The reputed international layers/consultant would prepare a detailed proposal on the part of the exporters to ministry of commerce, he added.
“Despite the proposal made by REAP to give enough time to examine the negative impacts of normalisation trade with the neighbouring country, the list was finalised by the ministry posting a risk over the important rice industry of the country,” he added.
In reply to a query, he said the ministry should announce the safeguarding measures prior to normalisation of trade with India to remove concerns of the industry/exporters/growers of rice.
REAP, earlier, has recommended the government to include all kinds of rice in the proposed negative list of trade with India, the exporters have shown their serious concerns over the recent developments of importing the commodity from the neighbouring country and phase out plan. The imports of cheaper commodity from outside the border would not only cause us loss of domestic, but also international markets including Afghanistan, Iran and Central Asian states.
It is worth mentioning here that REAP in a recent statement has claimed that traditionally the price of Indian basmati and other rice varieties used to be at least $100-300/MT higher than Pakistani rice varieties, but after the arrival of a new crop in Oct-Nov 2011; India taking advantage of its huge stocks, bumper crop and devaluation of its rupee by 15-20 per cent reduced their prices by 20-30 per cent and now they are selling $100-300/MT cheaper than Pakistani basmati and other varieties, such as Kianat (1121). Recently, the government of India
has reduced MEP on basmati rice from $900-700/MT, which is far below the Pakistani basmati rice prices of $900-1,100/MT. Earlier, Indian government had lifted the ban on export of non-basmati rice and allowed export of two million tonnes of non-basmati rice. Consequently, Pakistan has lost its brown rice market of EU of nearly 170,000 tonnes to India and is facing great difficulties for export of its basmati rice to Middle East and other countries of the world.
The prices of long grain Pakistan irri had gone down drastically, which is hitting the farmers of Sindh who are demanding compensation for their losses. Secondly, the free import of cheaper Indian parboiled Pusa/1121 will reach the market of Afghanistan by land route and ruin whatever little export Pakistan is doing to Afghanistan and bring all the parboiling plants imported from India to a standstill. Once basmati and 1121 sales are affected, it will indirectly hit the farmers who will not grow basmati rice in future and go for cheaper hybrid varieties threatening to close down the $2.0 billion rice export of Pakistan.
If the government allows the import of Indian rice into Pakistan, then our farmer should also be given the facilities of matching with the subsidies being given to Indian farmers, so that our farmers are able to protect their livelihoods. Indian government was giving about $30 billion in subsidies to its farmers. The cost of urea and DAP was also less than 50 per cent of the Pakistani prices and Indian farmers were also getting cheaper electricity and fuel.