KARACHI, Feb 8: Exporters have criticised the Rice Advisory Board for its failure to focus on the core issue of exorbitant increase in the prices of all varieties of rice during the current season.

They have also rejected the board’s advice not to enter into export commitments prior to procurement of grain.

In a recent meeting, presided over by caretaker Federal Minister for Food, Agriculture and Livestock Mohammed Esa Jan Baloch, the board advised the rice exporters not to enter into export contracts prior to procuring grain in view of highly volatile prices of rice.

However, rice exporters have raised a question that when there was an export surplus of three million tons, why rice prices have doubled and the supply chain had been disturbed.

They pointed out that although the board suggested measures to increase production of rice, it overlooked causes of price-hike, i.e. smuggling, hoarding and abuse of pre-shipment finance facility provided to exporters.

It was further pointed out that a huge quantity of rice had been hoarded by big exporters beyond their actual requirement.

They obtain pre-shipment export finance and regular finance and feel no pinch in paying mark-up as increase in price benefit is much more than the mark-up, they stated.

They further stated that when prices of rice have doubled and still there were eight months for the new crop to come and when there were no signs of price stability, the worst affected small and medium sized rice exporters have been forced to close their setups to avoid further losses.

Therefore, a mere advice from the board and its experts for avoiding export contracts prior to procurement of rice is hardly workable, they said.

Zulfikar Thaver, president, Union of Small and Medium Enterprises (Unisame), while appreciating the advice of experts, invited the attention of the board to the fact that the small and medium enterprises (SMEs) have limited resources and they always face financial constraints, therefore, they could not keep themselves covered as advised by experts.

“The SMEs are even not in a position to obtain finance from banks as they have no collateral to offer unlike big companies who have mortgaged collateral at even exaggerated values and obtained finance,” he added.

Mr Thaver said only last week the already inflated prices of fine rice further rose by $35 per ton putting both SME exporters and grocers in a turmoil as rice exporters work on a meagre profit of about $15 per ton on export of fine rice and $5 per ton on coarse rice.

Similarly, he said grocers are also unable to recover old bills till they do not make fresh supplies.

He urged the board to take notice of the situation and evolve a strategy for SMEs on proper lines.