As rice export season begins, all early clues regarding Basmati exports are a cause of concern.

The declining trend is already well established: in the last three years, Pakistan has lost around 40 per cent share in the global market — from 970,000 tonnes in 2010 to 630,000 tonnes in 2013.

Currently, domestic prices are so high that exporting Basmati at this price would be an uphill task.

The exporters are resigned to the fact as well. At the current rate of Rs150 (around $1.5) per kilogramme for better quality Basmati rice, a tonne would cost around $1,500 — excluding other expenditures like inland and export freight, profit margins and port handling, both domestic and destination.

Over the last three years, Pakistan’s Basmati price pattern explains the difficulty for exporters this year: it ranged from $850 (in 2010) to $1,000 (in 2013) per tonne.

The differential is huge enough to deter exports. So, the price differential would define the export context, and make things difficult for everyone.

The Indians, on the other hand, have dropped their Basmati price by $200 per tonne and have been selling it at around $1,050 per tonne over the last three years.

On the basis of that price reduction, they first took over the Iranian market — one of the biggest — and may capture a few others in future; staggering Pakistani Basmati export and, as a result, even domestic production.

What makes these factors and their results a sorry reading for Pakistan rice watchers is the silence and apathy that officials and exporters have displayed during this period.

Instead of planning to save Basmati exports, they are still fighting among themselves about who would control pre-shipment inspection regime, ignoring the bigger fact that if there are no exports, there would neither be need for such a process nor someone controlling it.

The fight only represents clash of egos in some circles.

Those who are planning are reaping the benefits as well. The Indian example fits the Basmati context. The Indians exports increased by almost 50 per cent — from 2.37 million tonnes in 2011 to 3.45 million tonnes this year.

Pakistan needs to improve its research in the field and invent in better yielding seeds that can help bring the cost of production down.

The Indians, the Chinese, the Thais and others have done the same. They first concentrated on their domestic markets, where better seeds helped them double and even triple their per acre yield.

The quality assurance was also inducted in the seed. The Indian Basmati varieties yield more than double in Pakistan, changing the entire economics of the crop.

In Pakistan, the old seed first saw its yield stagnate between 25 to 30 maunds per acre, then become vulnerable to diseases (leaf blast and leaf roller), that hit the yield further. This finally changed the economics of the entire crop.

As production started dropping, domestic prices started going up. In the last three years, they have gone up by almost 50 per cent — from Rs100 per kg in 2010 to Rs150 per kg in 2013. With the price increase, the rice exports, already being dumped in low-end markets, lost their commercial sense.

All institutions involved in the production and export process watched it happening without intervening at any stage to stem the rot, let alone trying to reverse the process.

The exporters’ efforts of keeping domestic market suppressed (getting cheap rice) and dumping it in relatively easy export markets like the Gulf States only kept the pressure off the planners.

As long as exporters made money at the cost of farmers, no one noticed the rot. Now, with domestic prices skyrocketing beyond reasonable limits and exports drying up as a result, things are spinning out of hand.

The farmers are hit by two factors: declining yield and rising cost of production. So, they cannot sell rice below a certain price.

The exporters have seen their cost of doing business multiplying with rice price rising and taking inventory keeping cost up with it, freight charges going up significantly and long hours of load-shedding hindering business — from husking to milling — and all of them adding to the cost of business.

With both costs cumulating, no international bulk buyer is ready to pay the exceptionally high price of Pakistani Basmati rice.