ISLAMABAD, Feb 11: Pakistan could export up to 4.0 million tons of rice in 2008-09 financial year but government intervention is making rice more expensive and that is hurting overseas sales, exporters said on Wednesday.

Rice exports from Pakistan rose 4.6 per cent to 1.1 million tons in the first six months of the financial year to December, compared with 1.05 million tons in the same period last year, official data showed.

But exports fell more than 50 per cent in January from the same month in 2008 following a government decision to buy rice from traders and enter the export market, according to two exporters.

Government data for January exports has not been released.

“We will consider ourselves lucky if we are able to export 3.4 million tons this year,” said Abdul Rahim Janoo, chairman of Rice Exporters Association of Pakistan.

With a bumper crop expected of more than 6.5 million tons, from 5.50 million tons the previous year, the government decision to buy rice and paddy was aimed at helping farmers and maintaining stability in domestic prices.

Janoo said the government was buying Basmati rice at Rs3,000 ($38) per 40 kgs, which equated to an export price of $1,300 to $1,400 a tons, leaving Pakistan uncompetitive in the international market.

Another senior REAP official, Haroon-ur-Rashid, said nearly 80 per cent of more than 1,000 mills across the country had been closed in the absence of new export orders as Pakistan was losing markets to competitors, such as Vietnam and India.

Pakistan exported 3.3 million tonnes rice in 2007-08. Rice accounts for about eight per cent of Pakistani exports and 12 per cent of gross domestic product.

—Reuters