HYDERABAD, Nov 30: Around 900 rice mills in Sindh and Balochistan have decided to close unless Pakistan Agriculture Storage and Supply Corporation (Passco) start procuring rice from them in accordance with its announcement.

A decision to this effect was taken by the Sindh-Balochistan Rice Millers Association in Larkana, its president Arif Mahesar told Dawn on phone.

“The Passco hasn’t started procuring rice from mills and out of 50 agreements they have signed only seven to eight mills are buying paddy from growers”, said Mahesar.

He believes that rice exporters are earning around $50 to $60 extra on each metric ton in the absence of local buyers. “So we have decided to close our mills from Monday,” he said.

Passco had initially announced after consultations with growers that it would procure paddy but then it changed its mind and decided to procure rice from millers, provided they offered Rs750 per maund to growers. Passco plans to procure 500,000 tons of rice each from Sindh-Balochistan region and Punjab.

Growers said that the mills had so far purchased only four to five thousands tons of paddy and, therefore, it was for Passco to implement its announcement by establishing centres in Sindh-Balochistan for expeditious procurement of rice.

“The export price of rice (coarse variety) is not beyond $325 per metric ton while the exporters want to purchase it at Rs750 per maund against the actual price of 900 per maund. The exporters now claim that international market has been choked,” said Sindh Abadgar Board president Abdul Majeed Nizamani.

Passco has promised to set up 25 centres in place of 55. It had claimed that it would double the number in the next phase. Reports said that only five centres were set up in lower Sindh.

Growers are apprehensive that this time the exporters would have a field day in the market because it has sensed that growers are not willing to sell paddy to Passco, given its poor performance.

It has been reported that per metric ton cost of rice of coarse variety is $350 and, therefore, they should pay Rs900 per maund to growers for which they are not willing and insist to purchase at Rs750 per maund.

“Even broken rice is being exported to Africans countries,” said Nizamani. He said that Passco had announced to purchase the coarse variety at Rs1200 and Rs1400 (special) per maund and basmati and super basmati at Rs2400 and Rs3000 per maund.

On the other hand, the exporters have blamed rice growers for demanding more for paddy through Passco which is ready to purchase it at about Rs700 per maund.

Abdul Aziz Ghaffar, a member of the managing committee of the Rice Exporters Association Pakistan, said “as per my studies, a farmer’s cost of per acre input comes to around Rs15,000 with 50 maunds per acre yield”, he said.

He said that when the grower is spending Rs300 per maund on paddy and getting Rs600 then its not a bad bargain given the national interest involved.

This year, a bumper paddy crop is being reported as it was cultivated even in areas like Nawabshah, Khairpur, Sukkur and Ghotki where its cultivation is not allowed.

According to REAP’s Abdul Aziz Ghaffar, Passco obtained loan of Rs31 billion with 17 per cent mark-up for one million tons of rice against storage capacity of just 80,000 tons.