Stiff competition abroad: rice exports dip by 35 percent in two months: exporters

Pakistani rice exporters are fast losing ground in the international market to other rice exporting countries, such as India, because of, what sources claimed, stiff competition abroad. The country”s rice exports witnessed an alarming decline of around 35 percent during the past couple of months against exports recorded during the corresponding months last year. 

According to sources, artificial price hike in local market and hoardings have also contributed to the drastic decline in rice export which may badly affect the overall export of the commodity during this financial year. Meanwhile, the record decline in export price of non-Basmati rice from India is creating tough competition for domestic products in the international market. 

Major rice importing countries, especially in the Middle East, are looking towards India which has become the second largest exporter of rice in the world this year. According to rice exporters, who did not want to be named, almost 35 percent and 30 percent declines were observed during the past two months in terms of quantity and value, respectively. 

Basmati rice exports, according to exporters, declined more than 40 percent during the past couple of months against figures in corresponding months last year. Besides, export of non-basmati rice also witnessed at least 20 percent decrease. 

Exporters said that over the past couple of months, only around 100,000 tons of basmati rice was exported against the at least 200,000 tones of the product exported during July and August this year. Over 60,000 tons of non-basmati rice has so far been exported, they claimed. 

According to last year”s statistics, of the total 6.5 million tons, total production of Basmati rice was around 2.5 million tons. Total consumption of basmati rice in the country is around a million tons and the remaining volume of 1.5 million tons is set aside for export. Total production of non-basmati rice stood at 4.3 million tons and local consumption is roughly a million tons while the remaining 3.3 million tons was exportable. 

The total production of rice in the country was 6.8 million tons while total consumption of rice in Pakistan was 2.8 million tons. Therefore, Pakistan had the potential to export four million tons of rice. Decline in exports, according to sources, was mainly because of the less competitiveness of Pakistani rice in international markets in terms of its price as major exporter and competitor, India reduced the export price of the commodity by 16 to 17 percent in the international market. 

Exporters here are fast losing lucrative markets in the Gulf countries where Indian rice is replacing Pakistani commodity because of wide price difference. Besides, the loss of Iranian market after the economic sanctions imposed by the US on Tehran has caused a reduction in Pakistani export of rice, sources maintained. 

On the other hand, promotion of hybrid rice in the country was also attributed to the decline in exports. Domestic private sector had been promoting hybrid rice, instead of basmati rice in the Kallar track, which led to a reduction of basmati rice production. 

As a result, not only price of Basmati rice escalated in the country, but also affected export of rice because hybrid rice was of inferior quality and was priced less than basmati in the international market. The decrease in the production of basmati rice was also benefiting India. 

According to sources, the Indian government had reduced minimum export price of non-basmati rice after exports failed to pick up. New Delhi had allowed limited exports of non-basmati rice after a bumper crop in 2010-11. India had banned exports of rice, except the costlier basmati variety, to beef up supplies in the domestic market and cool down soaring prices in April 2008. 

Currently, the increased domestic production and lower export of basmati rice last year resulted in abundant availability in the Indian market. These factors brought down prices of this elite variety. With this move, India for the first time, has become the second largest exporter of rice after Thailand. 

Copyright Business Recorder, 2012

Muhammad Ramzan Rafique
Muhammad Ramzan Rafique

I am from a small town Chichawatni, Sahiwal, Punjab , Pakistan, studied from University of Agriculture Faisalabad, on my mission to explore world I am in Denmark these days..

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