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PAKISTAN’S rice exports have been falling in recent years,
mainly due to higher prices, energy crisis, poor quality seeds, low
yield and persistently lower commodity prices in global markets.
The
fall has a bearing on the country’s economy for rice is the second main
earner of foreign exchange for the country after textiles.
However,
the office of Global Analysis of USDA has raised Pakistan’s exports
forecast by 0.1m tonnes to 4.5m tonnes on a stronger pace of trade.
REAP in a recent meeting with officials pleaded for measures to either reduce the cost of production or introduce high-quality seeds to increase productivity
In the just-ended fiscal year of 2015-16, rice exports
witnessed a decrease of 8.60pc. The country earned $1.86bn from these
exports during the year compared to $2.04bn earned in the fiscal year
2014-15. Besides, 503,037 metric tonnes of basmati worth $455.25m was
exported as compared to 523,450 tonnes a year ago, valuing $601.27m.
Meanwhile,
for 2016-17, USDA Grain Report forecasts global production at a new
record, primarily due to a larger crop in the United States, while
global trade is forecast lower, with reduced imports and consumption in
Bangladesh, Iran, and Nigeria. USDA expects about 20pc larger purchases
by Saudi Arabia and Azerbaijan from Pakistan. Saudi Arabia would in fact
import about 1.6m tonnes of rice during the period. The USDA maintains
Pakistan’s rice export quotes at $410/tonne.
The Rice
Exporters Association of Pakistan (REAP) in a recent meeting with
officials of the ministry of national food security and research in
Islamabad pleaded for measures to either reduce the cost of production
or introduce high-quality seeds to increase productivity.
The
ministry asked the chief secretaries of the provinces to take
appropriate measures to facilitate growers in lowering the cost.
While
looking into the reasons for decline in exports, the fact remains that
high production cost of rice is hampering its sales in the international
market. Exporters are finding it difficult to sell the commodity
because of sluggish demand and comparatively higher price.
The
price of Pakistani rice is higher than the paddy produced by India and
other regional countries. The price of Pakistani basmati is higher by at
least $100 to $150 compared to Indian basmati, and, hence, selling it
is a big challenge.
Since 1997, no new basmati seed has
been introduced in the market and that’s the reason for the low yield
per acre, which has pushed rice prices higher. India, on the contrary,
has introduced five new seed varieties in the last 10 years and that has
helped it in increasing yield.
Another step the
government could take is to subsidise rice exports so that the stock
could be disposed of, Malik Jahangir, a REAP official suggested. “If we
fail to export the existing stock, then next year farmers will not grow
the grain.” The association also wrote to the Rice Research Centre, Kala
Shah Kaku Lahore, but received no appropriate response.
An
office-bearer of the Pakistan Rice Growers Association says hybrid
varieties are becoming popular and being used in many areas, giving
better results. Pakistan’s rice exports have crossed the 4.0m tonne mark
in the past. If the country’s production during the year 2016-17
reaches 7.0m tonnes, trade surplus will surely surge to 4.5m tonnes.
But
the problem arises from the lower prices being paid to growers which
are compelling them to shift to alternate crops. A number of rice
growers in Sindh have already switched to sugarcane due to low rice
prices. However, the hybrid seed, one of them say, can resolve the
problem, for it produces higher yields on smaller land. China, being a
big market, likes to use hybrid seeds for better results. However, there
are concerns among Pakistani farmers and officials regarding effects of
hybrid produce on both human beings and the soil.
Although
the United States produces less than 2pc of the world’s rice, it is a
major exporter, accounting for more than 10pc of the global rice trade
per annum.
In Thailand, rice and corn production in
2016-17 is expected to gradually recover from drought-reduced production
in 2015-16 due to an acreage expansion and average yields. Rice
production is forecast to increase to 17.5m metric tonnes, up 11pc from
15.8m tonnes in the just-ended fiscal year, assuming some recovery of
off-season rice production. While new-crop rice supplies are tight in
2016, larger supplies in 2017 will potentially boost Thai rice exports
to 10m tonnes. Meanwhile, supplies from new-crop in 2016 will likely
limit Thai rice export potential at around 8m tonnes.
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