KARACHI, April 1: Indian rice importers are placing big orders with their Pakistani counterparts in order to replenish their depleting stocks to meet their international and domestic commitments.

However, rice exporters and traders apprehend that if the government does not immediately impose a ban on rice export to India it will not only create shortage in the domestic market but would also trigger renewed price spiral, which has already witnessed 200 per cent increase in a year.

The reason for rush of orders from the Indians is the recent move by their government to further enhance minimum export price (MEP) to $1,000 from $650 per ton for all non-basmati rice varieties. Simultaneously, the Indian government also abolished import duties on rice to encourage its import, rice exporters and traders said.

Looking ahead into fast developing global scenario of shortages and price spirals of farm produces, the Indian government in October last introduced MEP of $450 per ton to discourage rice exports. Thereafter, there had been a number of further increases in MEP with the fourth one taking the minimum price to $1000 per ton.

Shamsul Islam Khan, a leading exporter, said at present, rice import orders from India were flooding local markets through land and sea routes and this had triggered a fresh wave of price hike.

He demanded of the government to immediately impose a ban on rice export to India to avoid a crisis similar to that of wheat faced by the country recently.

“In Pakistan we are still following ten years old policy for rice export, which do not allow the country to benefit from rapidly increasing rice prices in the world market, another exporter Akmal Paracha said.

India is one of the largest rice producing and exporting countries with a paddy crop size of around 90 million tons. It annually exports around four million tons of rice, including one million tons of basmati.

Akmal Paracha said that the next paddy crop was eight months away and if exports to India were allowed it would also damage ‘our export market’ as exporters will not be able to meet commitments of their traditional markets developed in years.

The country annually produces around 1.7 to 2 million tons of Irri-6 but this season about 16 per cent of paddy was damaged because of floods in crop areas of Sindh and Balochistan.

As a result only 1.4 million tons of Irri-6 was harvested and around 650,000 tons have been already exported. The remaining 750,000 tons rice is required for domestic market and for exports, trade sources said.

Similarly, medium variety Irri-9 and D-98 (non-basmati) were also damaged by the floods and their prices have reached unprecedented high at Rs38,000 per ton and Rs49,000 per ton, respectively, sources added.

Another rice exporter Zulfikar Thaver said the existing financial tools for rice exports, such as refinance facility of the State Bank, are most damaging and owing to these foreign buyers are securing rice from Pakistan at very low price and they even force local exporters to stock it at home at their expense.