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REAP's Rice Conference - 26/27 November 2018 at Larkana
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News Headlines


DAILY DAWN (26/03/2018)


RICE exporters are lobbying for geographical indication (GI) for basmati grown in Pakistan to boost its exports and overall earnings.

Prime Minister Shahid Khaqan Abbasi has only recently promised to resolve this long- standing issue. 

Once exporters get all basmati varieties grown in the country covered under the GI law, they can protect themselves against Dubai-based Indian trading houses that buy different Pakistani rice varieties on the cheap and sell them to global markets under Indian brand names.

On prime minister’s instructions, the federal cabinet has already authorised the commerce division to initiate legislation on GI. How long it will take to do so and whether this government whose term will expire shortly will be able to make a GI law is anybody’s guess.

In addition to intensely lobbying for the passage of the much-needed law, the Rice Exporters Association of Pakistan (REAP) has also been aggressively pursuing potential buyers of Pakistani basmati rice. Rafique Suleman, vice chairman of the association, recently unveiled plans for taking a delegation to Saudi Arabia and organising a festival there to promote basmati rice.

Certain issues continue to impede growth of basmati rice, including the absence of a geographical indication law and a lack of penetration of enough brands of basmati in export markets

In February, REAP held International Buyers’ Recognition Award in the United Arab Emirates. The event has helped in boosting sales of basmati rice there, exporters say.

According to a recent Dawn report, our GI law has been pending for 17 years owing to differences between various lobby groups. Apart from basmati, the passage of such a law will also help increase exports of other products, including Sargodha’s kinno.

Why geographical indication

According to the World Trade Organisation’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), a GI certificate establishes the territory of origin of a particular product.

“Once the basmati rice variety, for example, is certified under the GI law, it will officially become known as Pakistani basmati. And that will help us lodge complaints with the world trade body if that particular variety’s name is misused by another nation,” explains a leading Karachi-based rice exporter.

Recently, some Indian exporters reportedly moved to export a large quantity of Pakistani-origin rice to Indonesia under an Indian brand name. REAP officials brought this to the notice of the government, but nothing could be done to block the exports in the absence of proper GI laws.


Larger shipments of basmati varieties that are mostly exported under brand names, in retail and semi-wholesale packaging and their foreign buyers include superstores, fetch higher per-unit price than non-basmati varieties. Currently, the share of basmati varieties in our total volumes of rice shipments is low.
According to stats compiled by the Trade Development Authority of Pakistan, basmati shipments during the first half of this fiscal year amounted to 11.2pc of total rice shipments of all kinds.

For several years, this share has remained below 15pc, officials of TDAP confirm. Once export volumes of basmati go up, the country can expect a faster and bigger increase in export earnings of rice. So, boosting basmati exports can be a game-changer for Pakistani rice exports.
Forex earnings of rice are expected to touch $2bn mark this fiscal year. During the first eight months, $1.224bn already came in, according to REAP. Exports of basmati constitute roughly 22pc of total rice export earnings — double its share in rice export volumes.

Key issues

Certain issues continue to impede growth of basmati rice, including the absence of a GI law, lack of penetration of enough brands of basmati in export markets, an unscrupulous practice prevailing among traders who agree to sell basmati varieties to Indian traders on the condition that the packaging would not bear signs of origin and the continuation of basmati exports also in bulk that fetch lower per-unit price.

Officials of REAP seem to have rolled up their sleeves and trying to address all these and similar issues with the help of government agencies concerned and our foreign trade offices.

But growing domestic demand for basmati rice in our fast-expanding food industry and among upper middle-class and upper class households and slower than desired increase in local output also have a direct bearing on exports.

Production of basmati varieties, after falling below 2m tonnes in 2012-13, has shown a gradual rise to hit an estimated 2.5m tonnes in 2015-16, according to a senior official of the Ministry of National Food Security and Research.

“Even at this level the basmati output is slightly more than one-third of our total rice production (of 7m tonnes). Whereas, it’s important to push basmati production further, its share in exports even at the current level of output can be enhanced,” he insists.

But citing reasons of growing domestic demand, exporters say that unless the country is able to boost output of basmati at an annual rate close to 10pc for some years from now, export earnings growth will remain low.

Per-unit value

But what if the production of basmati does not grow fast enough to create enough exportable surplus after meeting increasing local demand? Exporters must then find room for enhancing per-unit price of basmati exports. During the first half of this fiscal year, the average export value of basmati varieties rose about 9pc to $1,012 per tonne from $930 per tonne a year ago.

However, this happened amid a general recovery in prices in the global rice market and average price of non-basmati rice also showed about 11pc increase, from $364 per tonne in the first half of 2016-17 to about $404 per tonne this year, according to TDAP officials.

One way of boosting the per-unit value of basmati could be to enhance high-end sales to famous chains of superstores. “That requires strong and well-established branding, strict compliance to all applicable rules of business, more attractive and custom-made, environment-friendly packaging,” says an official of Matco Foods, a well-known rice company that recently got listed on the Pakistan Stock Exchange.

Currently, Pakistan’s basmati rice market is too heavily concentrated in the Gulf Cooperation Council region. Exporters acknowledge the need for expanding the market base and many of them agree that with a little support of the government they can market large amounts of basmati rice to Afghanistan, Iran and some Central Asian and North African nations.

“We lost the Iranian market to Indians when Iran was under US sanctions. Indians made barter trade a reality while we just kept talking about it,” laments an official of HAS Rice, another leading rice exporting company.

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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