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Home > News Updates > News Headlines
News Headlines


DAILY DAWN (19/02/2018)


RICE exports seem to be on course to hit the four-million-tonne annual target during this fiscal year, fetching $2 billion in foreign exchange.

The fact that the commodity’s exports have rebounded despite a slower pace of shipments to China shows that exporters know what to do when orders don’t come in from the big buyer. Nevertheless, the slowdown has prompted our policymakers to seek tariff concessions from China to help exporters sell more to that country.

During this fiscal year, Pakistan has managed to export more rice to traditional markets like Afghanistan, Kenya, Oman, Qatar, Saudi Arabia, Spain, Tanzania, Britain and the United States, according to senior officials of the Rice Exporters Association of Pakistan (REAP) and trade data based on banking transactions during the first half of this fiscal year.

Despite a commendable performance during this fiscal year, one area of concern in rice exports is our inability to boost basmati shipments

Exporters have also penetrated deeper into various less-explored markets like Benin, Bangladesh, Comoros, Guinea-Bissau, Kazakhstan, Madagascar, Russia, Senegal, Somalia, South Korea, Togo, Uganda and Ukraine, the officials say.

Rice exports to China plunged to $105m in the previous fiscal year from a peak of $277m in the 2015-16 fiscal year, mainly because of slow demand and in the face of stiff competition with Indonesia, Thailand, Vietnam and the Philippines. These rice exporting countries enjoy relaxed tariffs from China as they are members of the Association of Southeast Asian Nations.

“We are lobbying Chinese authorities for some tariff relaxations to help our exporters regain the lost ground in the Chinese rice market,” says an official of the Ministry of Commerce.

He added that during the ninth round of negations on Pakistan-China free trade agreement (FTA) held earlier this month, the Pakistani side made out a strong case for tariff relaxation on key export items, including rice. “We hope that when we sign the amended FTA in March, we’ll gain easier access not only for rice but for many other items.”

Official data for rice exports during July-January has not yet out, but REAP’s senior vice chairman Rafique Suleman says Pakistan exported 2.28m tonnes of rice during the seven-month period, fetching $1.06bn. According to official data, exports during the same period of the preceding fiscal year were 2.08m tonnes ($877m).

He says the pace of shipments suggests the country can meet the full-year targets of 4m tonnes of exports volume and $2bn of earnings.

In the previous fiscal year, the country sold 3.5m tonnes of rice in foreign markets, fetching $1.6bn in revenue. Half-yearly stats for the current fiscal year put rice exports volume at 1.8m tonnes and earnings at $843m.

Rice markets rely heavily on REAP’s report on rice exports released ahead of official data.

Despite a commendable performance during this fiscal year, one area of concern in rice exports is our inability to boost basmati shipments. In July-December, basmati exports stood at 183,000 tonnes, about 4pc less than 190,000 tonnes a year ago. Earnings from basmati exports, however, inched up 4.5pc to $185m owing to a higher per-unit price that some leading exporters managed to earn on their brands, exporters say.
Many exporters continue to export large quantities of unpackaged basmati rice to the United Arab Emirates (UAE) where buyers connected with Indian trade houses package them and re-export elsewhere under Indian brands. Exporters complain the government is doing little to address this issue.

This and similar issues of branding and seeking recognition of some varieties of rice as basmati grade need proper government-to-government level handling. At the same time, our exporters also need to shift basmati exports from loose to packaged cargoes in 10-20kg rice bags or smaller retail packing and reach out to big chains of retail stores across the world, officials of the Ministry of Commerce say. Some big rice export houses that do this earn higher export returns.

As of 2016, Pakistan’s rice sector comprised 22 large processing mills (employing 100 to 500 employees each), nine mid-sized mills (with 50 to 100 employees each) and 76 small mills (each having fewer than 50 employees).

To promote basmati brands of high exports standards, we need more mid-sized and big mills where achieving economies of scale is possible. But this cannot happen without investment. The private sector and the government must ensure additional investment in rice milling for promoting rice exports, particularly those of basmati.

Exports of non-basmati rice continue to do well, as large paddy outputs in recent years have enabled exporters to build and maintain their exportable inventories at relative low cost. Besides, our exporters are now more capable of exploiting requirement gaps in importing countries as and when they appear — thanks largely to better access to market intelligence in this digital era and real-time interactions with their buyers made possible owing to growing digital communication.

In the first half of this fiscal year, exports of non-basmati varieties soared to 1.63m tonnes from about 1.47m tonnes a year ago, resulting in higher earnings of $658.3m against $535.7m, according to official data.

Exporters optimistic of achieving the 4m tonnes target of rice volume this fiscal year say that rice shipments to Kenya are in full swing. In July-January, Pakistan has exported 284,000 tonnes of the commodity to the African country.

They say that exports to some major buyers like the UAE, Saudi Arabia, Oman and Afghanistan as well as to European and African markets continue to see a decent rise. An occasional boost in exports to Spain and Bangladesh and some regaining of the lost ground in Chinese markets will also be helpful.

Encouraged by increased export earnings, a leading rice company last week got listed on the Pakistan Stock Exchange and announced plans for producing more value-added products like rice glucose and rice protein.

“We’re confident that our focus on high-margin products will give us better returns compared to our traditional rice exports,” Matco Foods director finance, Faizan Ali Ghori, told the media after the maiden trading of the company’s share on the bourse.

He said his company planned to triple its rice glucose and rice protein outputs of 10,000 tonnes and 1,000 tonnes per year with the help of money raised through the initial public offering.

Ministry of Commerce
Trade Development Authority of Pakistan
Ministry of Foreign Affairs
Official Gateway of Pakistan
Ministry of Finance
Federal Board of Revenue
Security & Exchange Commission of Pakistan
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