January 22, 2008	Tuesday	Muharram 12, 1429

ISLAMABAD, Jan 21: The export of basmati rice from Pakistan rose by 25 per cent in December 2007 over last year due to fall in supply of the commodity from leading rice producing countries in the international market, officials and analysts told Dawn.

Almost 19 per cent growth in export of basmati rice was witnessed in November 2007 as Pakistan’s main competitor India had raised the minimum export price of its basmati and other rice varieties to discourage their exports.

A senior official in the ministry of food, agriculture and livestock told Dawn that the export of basmati rice would increase further in the months ahead on the back of strong demand for the commodity in the Middle East and some European countries.

The statistics showed that the overall export of all rice varieties rose just marginally by 0.07 per cent during the first half of the current fiscal year over the last year. However, the export of other rice varieties dipped by 23 per cent during the period under review.

A break-up for the others (rice) was not available to calculate the actual decline in the export of various types of non-basmati varieties.

The official said that the new rice crop was expected to arrive in October-November next while the price of the commodity in local market had already witnessed more than 100 per cent increase during the last few months because of the higher than expected growth in export.

Another official in the commerce ministry said that the Pakistani exporters were selling basmati $300 to $400 cheaper than the Indian exporters in international market. As for as for non-basmati rice is concerned, India has a minimum export price of $500 a ton, while Pakistan is exporting the commodity at around $350 a ton, which is a big anomaly and needed immediate ratification.

Analysts said the production did not keep pace with the demand during the last few years, resultantly the surplus production for exports had been reduced. They said like India, Pakistan should also introduce a minimum export price to decelerate the pace of export of rice, particularly the basmati rice.

A leading rice exporter on condition of anonymity told Dawn that the government should allow export of rice in containers as against the current practice of shipload. He said that the decision would regulate the export of rice.

The exporter said the government should do away with the unsecured credit sales based on Documents against Acceptance (D/A), particular on export of basmati rice allowed by the State Bank of Pakistan (SBP).

The SBP requires basmati exporters to export double the value for which export refinance is provided to them. This has forced the exporter to sell at low price with long-term supply contracts to achieve the double export performance demanded by the central bank.

The exporter said the buyers were willing to pay in cash for rice but the SBP has yet to do away with the DA system, which also some time created financial crunch for the small rice exporters.

Some of these hapless exporters are now being threatened by their buyers that they must ship the next order at price much below their cost otherwise they might not get payment for the last shipment. The basmati prices have increased by over 100 per cent in last few months in domestic as well as overseas markets because production has fallen and the overall demand has increased, the exporter added.

The system in place by SBP only benefited the biggest exporters of rice who manage such sales due to their financial muscle with local banks for suitable export document discounting facilities and also have their own offices abroad for obtaining payment.