In a dramatic turn of events, Pakistan’s rice export surge is now at risk following the Indian government’s recent decision to lift the floor price on Basmati rice and ease restrictions on other rice varieties. This development has raised alarms within the Pakistan Rice Exporters Association (REAP), which has formally expressed concerns to the government regarding the potential impact on the international market.
Recent Export Performance
Previously, Pakistani exporters capitalized on India’s export ban, selling Basmati rice at $1,300 per ton, compared to $900 per ton for other varieties. With India relaxing its export policies, Pakistani exporters fear a decline in competitiveness and have urged the federal government to establish a Minimum Export Price (MEP) of $900 per metric ton to safeguard their interests.
Despite these challenges, Pakistan’s rice exports have shown remarkable growth in the early months of the 2024-25 fiscal year. During July and August 2024, exports reached 619,939 metric tons, a staggering 55% increase from 343,683 metric tons during the same period last year. The total revenue generated from these exports was approximately $468.22 million, up from $236.73 million in the previous year. Basmati rice accounted for 191,034 metric tons of this total, nearly doubling its volume compared to last year’s figures. The value of Basmati rice exports soared to $196.48 million, reflecting strong demand from markets across Europe, Central Asia, and the Gulf States.
Concerns Ahead
The recent policy changes by India could disrupt this upward trend. As Indian Basmati rice becomes more accessible on the global market, Pakistani exporters may find it increasingly difficult to maintain their pricing advantage. The REAP has highlighted this risk and is advocating for government intervention to stabilize export prices.
Additionally, the discrepancy in export data between various government agencies has raised eyebrows among stakeholders. While provisional data from the Pakistan Bureau of Statistics (PBS) reported a consistent quantity of exported rice, there were significant differences in revenue figures compared to those reported by customs authorities.
Conclusion
As Pakistan navigates these uncertain waters in the rice export market, the focus remains on maintaining its competitive edge while ensuring fair pricing for local farmers. The coming months will be crucial as stakeholders adapt to changing market dynamics and seek new opportunities amidst evolving global trade conditions. The resilience of Pakistan’s rice sector will be tested as it contends with both domestic challenges and international competition.
