KARACHI, Feb 4: Rice prices remained firm during the past week on good local demand, but traders said on Monday that high domestic prices and low crop figures had almost put the brakes on exports.
“Heavy buying from local stockists on reports of low crop this season has kept the prices firm, otherwise there was not much activity in the market,” said Haji Majeed, a rice exporter in Karachi.
He added that exports orders were negligible and traders were only shipping their previous commitments.
“The lower-than-expected output from the latest crop has raised the domestic prices sky high...no foreign buyer is willing to pay the price we are quoting for export,” Majeed said.
Pakistan has scaled down its rice output estimate for fiscal 2001-02 (July-June) by one million tons to 3.74 million tons because of irrigation water shortages during the growing season.
The country’s annual domestic rice consumption is around 2.3 million tons.
Majeed said some traders were building up stocks in anticipation of increased demand from Afghanistan.
“Buying for Afghanistan has pushed the domestic prices higher by around Rs900-950 per ton in two months,” he added.
Pakistan traditionally supplies 25,000 tons of rice a month to Afghanistan, but traders in Karachi said demand could increase due to continued drought in the war-devastated country.
Another rice trader in Karachi said local demand and buying for Afghanistan had pushed prices up to a point where Pakistani exporters could not match competitors offering Irri varieties of rice more cheaply on the international market.
“India is offering the same variety of rice at $130-$132 per ton while we are asking for $147-$148 per ton,” he added.
He said India had been selling at much lower prices to African markets, traditionally a stronghold of Pakistani exporters.—Reuters
