KARACHI: Rice exporters are braced for a lacklustre year ahead amid fears of at least a 30 per cent drop in production in Sindh due to damage to crops caused by flash floods earlier this year.
Besides, they also face fierce competition from India, which is offering lower prices to foreign buyers.
Chela Ram Kewlani, chairman of the Rice Exporters Association of Pakistan (REAP), a representative body of the sector, said Pakistan fetched $2.5 billion from rice exports by shipping 4.88 million tonnes of rice to various foreign destinations in the previous fiscal year (2021-22).
It was 1.19m tonnes more than the year-ago figure of 3.684m tonnes, which helped the country fetch a little over $2bn.
“I think rice exports may plunge to 3.5m tonnes this fiscal year (2022-23) in view of the damage to the crop in Sindh,” Mr Kewlani said. However, he was satisfied with Punjab’s figures.
Say exports may plunge to 3.5m tonnes this year from 4.8m after Sindh crop hit by flooding
He said rice crop arrivals in Sindh were due in October but had been delayed by a month due to recent flooding that inundated large swathes of the country.
Last year, the country’s rice production was 8.5m tonnes, whereas local consumption stood at 3m tonnes.
On incentives, the REAP chairman was not happy with the fact that rice exporters were ignored when Finance Minister announced big power relief for the export sector last month.
According to the Pakistan Bureau of Statistics, basmati exports plunged to 173,684 tonnes (fetching $182m) in the July-October period from 229,791 tonnes ($198m), reflecting a drop of 24.4pc in quantity and 8.4pc in value.
Other rice varieties fetched $364m with shipments of 791,676 tonnes compared to $396mn (861,999 tonnes), down 8pc each in quantity and value.
In October alone, basmati rice exports stood at 45,154 tonnes ($51m) compared to 43,821 tonnes ($43m) in September and 51,499 tonnes ($45m) in October 2021.
Exports of other rice varieties stood at 205,744 tonnes ($92m) in October compared to 163,497 tonnes ($76m) in September and 297,576 tonnes ($126m) in October last year.
Faisal Anis Majeed, the deputy convener of the Federation of Pakistan Chambers of Commerce and Industry’s (FPCCI) rice committee, said foreign buyers were turning towards India, whose rice prices were less than Pakistan’s by $80 to $100 a tonne.
He said the rupee’s depreciation over the last month also created problems for exporters, making exports expensive.
Meanwhile, it has been noted that consumers are paying higher prices for local rice due to massive exports in the previous fiscal year.
Prices of various rice varieties have gone up by 60-70pc in the last one and a half years. However, market sources said rice hoarding also went unchecked as “the mafia” kept the commodity out of the market to create an artificial shortage and fetch better prices.
While the wholesale rates of different rice varieties now hover between Rs85 and Rs320 per kilogram, retail prices seem to have no limits due to fat margins.
Published in Dawn, November 20th, 2022