October 31, 2001	Wednesday	Shaba’an 13, 1422

KARACHI, Oct 30: Export of new crop rice having an estimated value between $350 to $400 million in the world market is in doldrums as exporters are reluctant to enter into foreign contracts owing to highly volatile dollar/rupee parity, rice exporters said.

After first October’s free fall of dollar against the rupee when the dollar on a single day shed 140 paisa — or more than 2 per cent of its value in open market and threw off 50 paisa or about 0.8 per cent of its value in the inter-bank market the parity between both the currencies, thereafter, remained highly volatile.

Despite the fact the dollar had made some recovery on Oct 24 at Rs61.70/61.80, but on the very next day it fell to Rs61.45/61.55 for buying/selling respectively, the lowest level of the month. But on Oct 29, it again recovered to Rs61.65/61.75 for buying and selling against the rupee, respectively.

Rice exporters fear that with a narrow profit margin on rice exports, particularly for Irri-6, it was not possible for them to enter into any export contract at this juncture when dollar/rupee parity was highly volatile.

The representative of small and medium sized rice exporters, Zulfikar Thaver told Dawn despite the fact that the new rice crop season had started from Oct 1, but there is hardly any activity on the export front as exporters are not entering into any export contracts.

Besides, the volatile dollar/rupee parity, he said rice exporters are confronted with a cheap rice being dumped by Indian exporters in the world market.

Zulfikar said that Indian government is almost giving 100 per cent subsidy on rice export as it procures rice at Rs10 per kg from millers and gives the same at Rs5.60 per kg to exporters. Whereas in Pakistan, he said, presently Irri-6 rice was available at Rs8.50 per kg to the exporters.

The country is expected to harvest a total of around 4.3 million tons of rice this season (2001-02), out of this about 2.3 million tons will be of Irri-6 and 2 million tons of Basmati rice. Last year total output of rice was at 4.6 million tons.

However, after meeting domestic consumption, around 1.5 million tons would be exportable surplus comprising 0.5 million tons of Basmati rice and around one million tons of Irri-6. But last year owing to carryover stocks of around 0.4 million tons there was higher quantity of around 2.3 million tons of exportable rice.

Another rice exporter Mahmood Ghaffar said that it was not possible for an exporter to enter into export contract with his foreign buyer when he could not quote a price because of volatile currency rates.

Presently average price of Irri-6 in the world market stands at $175 per ton (c&f), this means that one million tons of Irri-6 would fetch $175 million. Similarly, the average price of Basmati rice is $425 per ton (c&f) and this would get $212 million. As a result the country would be earning around $387 million on total export of 1.5 million tons of rice.

Zulfikar Thaver suggested to the government to at least fix the dollar/rupee parity for next three months which will help exporters to market the produce before March next year when Vietnam the main competitors in rice would enter the world market.