LAHORE, Nov 13: Saudi Arabia has shown interest in buying one million tons of rice from Pakistan and the government has pushed Pakistan Agriculture Services and Storage Corporation (Passco) in the procurement drive to create exportable stocks.

According to sources in the Ministry of Food and Agriculture, the Saudi government showed this interest during recent visits of Foreign Minister Shah Mehmood Qureshi and subsequently President Asif Ali Zardari.

The Saudi government has also issued clearance letters for importing the required quantity – 50 per cent Irri-6 and 50 per cent Basmati.

Should that happen, the rice exports may swell by $700 million at the current price factor, the sources said.

But it has become government-to-government affair, pushing the Pakistan in rice trade for the first time, they said. The government hopes that Passco could save the day for it by buying the required quantity and also stabilise domestic market by skimming off surplus yield this year.

Confirming the news, Rice Exporters Association of Pakistan (Reap) Chairman Muhammad Azhar Akhtar said: “The Saudis last year had contacted the association for import of half a million tons of rice but it could not export because of internal wrangling. That is why the Saudi government has kept the association out of import this year and directly approached the government.”

This year, the Saudis have doubled the quantity and also allocated money for the purchase. This opportunity should not be wasted because it could catapult Pakistan onto a different plank as far as rice exports are concerned, he said.

The trouble is that Passco does not have required wherewithdawal to make such a purchase, he said. The government must actively pursue the possibility of Saudi import and help in every which to Passco achieve procurement target, he said.

Mr Hamid Malhi of Basmati Growers Association thinks that Passco’s decision to buy rice from those mills that purchase paddy at officially declared indicative price would help it procure the commodity in required quantity besides stabilising domestic market.

Passco would also be helped by withdrawal of moisture limit, which it set at 12 per cent and dented its shopping spree in the initial two weeks.

Since farmers could, in no way, meet the moisture limit, Passco had hard time procuring rice. Both these decisions must help improve procurement drive of Passco in the next few weeks, he hoped.