ISLAMABAD: Amid a global economic slowdown, Pakistan’s exports of rice posted a negative growth of 15.82 per cent in the first seven months of the current fiscal year mainly due to the flood devastation of paddy fields in Sindh.

In value, the total rice exports dipped to $1.08 billion in July-January this year from $1.28bn in the corresponding months of last year. The stagnation in export proceeds, especially of basmati rice, is mainly because of several reasons particularly the under-invoicing of rice to Afghanistan and Iran under the barter trade system.

Rice Exporters Association of Pakistan (Reap) Chairman Chela Ram Kewlani told Dawn that the data compiled by the Pakistan Bureau of Statistics (PBS) did not show the basmati rice exports to Iran and Afghanistan. However, he said the crop of long-grain white rice (non-basmati rice) has witnessed a 40pc reduction in Sindh.

As a result of this production loss, Mr Kewlani said that the non-basmati exports decline is justified. However, he did not agree with the government statistics showing a decline in the value and quantity of basmati exports.

Local prices witness an unprecedented surge

The PBS data showed that basmati exports in quantity fell by 22.95pc to 316,055 tonnes in 7MFY23 from 410,207 tonnes over the corresponding months of last year.

The non-basmati rice exports fell by 24.94pc to 1.62 million tonnes in 7MFY23 from 2.17m tonnes over the corresponding months of last year. Despite a substantial decline in exports, the prices of basmati and non-basmati increased unprecedentedly in the domestic market.

REAP Senior Vice Chairman Haseeb Khan told Dawn that people have invested money to stockpile rice after a slowdown in the real estate sector.

He said the carry-forward rice stocks were also negative for the past couple of years leading to an increase in domestic prices. Rice has emerged as a profitable sector for investors due to a slowdown in other sectors especially real estate.

Mr Khan said that the export of basmati to Iran and Afghanistan is misdeclared as low-quality rice. He further said that even the quantity of rice is also not declared at the border stations. Pakistan’s customs should look into this under-declaration of value and variety of rice to these two countries, he further said.

Rice seeds

There are eight districts in the world whose basmati rice is famous out of which six districts are in Pakistan and two in India. However, there are issues now cropping up, especially with rice seeds in the country.

The unabated housing schemes on GT Road in Punjab province are eating up this rare earth in six districts that are suitable for the cultivation of the world’s best basmati rice. However, the government did not take any action in this regard.

Former Chairman REAP who is not willing to be named told Dawn that inflation also has an impact on domestic prices. He said rice price in the international market has also seen an increase which has an impact on domestic rice.

Published in Dawn, February 19th, 2023