KARACHI, Feb 27: The country earned around $160 million by exporting 0.7 million tons of Irri-6 rice at an average price of $226 per ton (fob) during the last five months (Oct to Feb).

The new crop size has been estimated at 2.2 million tons which is going to fetch sizeable foreign exchange earning because over 0.7 to 0.8 millions tons would still remain as exportable surplus.

After hitting supply problem owing to winter rains which created high moisture in paddy, many export shipments faced snags in late December and early January.

Consequently, short supply during this period surged Irri-6 prices in the domestic market to Rs14075 per ton from earlier rates of Rs11,750 per ton.

Rice traders and exporters told Dawn that around 0.536 million tons of Irri-6 had been exported in bulk and about 75,000 tons through containers during this period.

It has been further disclosed that on average around 15,000 tons per month was exported in containers to East African countries, including Kenya, Uganda and Zambia. Furthermore, around 0.1 million tons found its way to Iran and Afghanistan through border trade.

A sudden surge in prices for a short period also pushed world market prices higher and Irri-6, which was being sold at around $215 to $218, soared to $245 per ton (fob).

Pakistan, having advantage of earlier paddy harvest, helped avert huge losses to exporters because major players in rice like China, Vietnam, Indonesia and Thailand, enter the world market late after harvesting their winter paddy in March.

According to rice exporters, for a short period when paddy was in short supply and middlemen were unable to maintain supply of Irri-6, it resulted in soaring prices as many exporters, in order to meet shipping schedule and to avoid heavy demurrage, indulged in panic buying.

The Irri-6 prices, which were initially stable at Rs11,750 per ton, started to move higher as a ship anchored at Karachi harbour for loading rice faced short supply and exporters who were involved in shipment went panicky and in order to avoid heavy demurrage rushed to cover their position from open market which pushed rice prices in the domestic market.

Normally a chain of ships keeps arriving at country’s ports to load rice during peak season, but somewhere late in December and early January, smooth supply or Irri-6 was disrupted owing to high moisture content created by heavy rains in paddy.

As a result of this situation, middlemen were unable to maintain supply of paddy to processing mills which disconnected the supply chain.

In the meantime when a ship faced with short supply while waiting at the harbour, 10 more ships reached the outer anchorage to load rice.

As a result of this, exporter came under tremendous pressure fearing $15000 per day demurrage, therefore, they indulged in panic buying which soared Irri-6 price to Rs1,475 per ton.

Exporters told Dawn that in peak season when every next day a ship arrives to load rice, a short supply to any of them would mean that a large number of ships would be detained at a time.

In this situation, around 0.360 million tons export contracts belonging to 10 exporters were put to jeopardy.

In case of breach of export contracts, exporters would also have faced GAFTA agreement (Grain & Food Trade Agreement) which could even resulted in cancellation of their licenses or payment of heavy penalties.

However, exporters said on improved supply, prices of Irri-6 rice have started to come down and are presently being quoted below Rs14000 per ton.

There is a strong demand that dryers should be installed in paddy growing areas and the natural method of dry should be done away to meet rapid movement of commodities in free world trade.