Pakistan has lost Iranian rice market to India due to lack of proper transaction channels and relatively high prices, which have negatively affected exports, rice exporters told Business Recorder. Earlier, Iran was importing about 0.6 million tonnes of rice from Pakistan, however India has taken over this market and as a result Pakistan rice exports declined, said senior vice Chairman Rice Exporters Association of Pakistan (REAP) Noman Ahmad Sheikh.
Talking to Business Recorder, he said the main reason behind this market loss was lack of proper transaction system between Pakistan and Iran; however the latter has developed proper channels with India, thus facilitating the whole process. Further Pakistan Research Institutes have failed to develop a single seed during last two decades contrary to India where a lot of new seeds have developed.
Due to outdated seed in the country, per acre yield declined and cost of production increased, said Sheikh adding that Pakistani rice prices are higher in the international market due to high cost of production and are resultantly losing market share.
However, the REAP officer bearer said that Pakistan is going strong in China rice market which would help in achieving about $2.5 billion rice exports in the current year. He said that government has neither incentivized rice exporters directly nor intervened/procured rice, however gifted about 0.6 million tonnes to China which helped recovery from gloomy market with respect to prices.
A delegation recently visited China and received a overwhelming response, said Sheikh adding that exporters are terming the new market a good omen which would certainly increase country's exports and bring foreign exchange earnings. He said Irri-6 market is stable; however Basmati rice has witnessed a major decline with respect to value and quantity over the past year in the country.
The country's rice exports declined by 12.3 percent in value, despite favourable 7.6 percent growth in quantity during 2015-16, mainly because of fall in commodity prices in the international market. Basmati rice declined by 27.9 percent in value and 7.5 percent in quantity, while other varieties under rice group witnessed a decline of 5.9 percent in value and improved by 9.9 percent in quantity, compared to the corresponding period of 2014-15. Depressed prices and rising cost of production encouraged farmers to substitute rice with fodder and maize.
Senior Vice Chairman of the Businessmen Panel of Federation of Pakistan Chambers of Commerce and Industry in a statement expressed concern over falling rice exports terming it damaging for the economy. Rice exports have witnessed a fall of 8.6 percent during financial year 2016 by fetching $2.035 billion which is a matter of concern for the stakeholders. He urged the government to intervene immediately by forming a separate Rice Export Company from private sector to handle all rice related issues.
Zahid Hussain expressed concern over the future of the country's rice exports as some major markets have been lost while some others are under threat. Pakistan has missed annual rice export targets for five years necessitating government intervention before it is too late as 3.86 million metric tonnes of rice was exported in 2016 compared to 4.26 million metric tonnes on the corresponding period of the year before, he said.
He noted that the highest shipments took place in 2009-10 when earnings from rice exports stood at $2.2 billion. Since then, the export has remained almost stagnant and now it is going down.
Government must come forward to save the second highest foreign exchange earning sector and provide incentives to growers many of who are switching to other crops; and the government must enable exporters to regain their competitiveness in the international market, he demanded.
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