Kenya's duty may hurt rice export

Published January 7, 2005

KARACHI, Jan 6: Rice exporters would not be able to meet $50m export target if Kenya implements 75 per cent import duty on Pakistan's Irri-6 variety. It has increased the duty from 35 per cent.

"We have set a target of $50 million earning through export of Irri-6 rice to mainly Kenya, Uganda and Tanzania during the current fiscal year," former chairman Rice Exporters Association of Pakistan (REAP) Abdul Rahim Janoo told Dawn on Thursday.

He said rice worth $30 million had already been shipped to these countries during July-December 2004-05 while the rest of the shipments were stated to be in jeopardy with the sudden increase in import duty by some African countries.

Pakistan's total rice exports of 1.9 million tons during the year 2003-04 consisted of 800,000 tons of basmati rice and 1.1 million tons of non-basmati rice. Kenya imported 175,000 tons from Pakistan during the last fiscal year followed by Tanzania with 18,000 tons and Uganda with 3,500 tons, making a total shipment of non-basmati rice to these countries around 200,000 tons.

Keeping in view the export of non-basmati rice, Pakistan is expected to lose 18 per cent of the total 1.1 million tons export. If the total export of 1.9 million tons is taken into account, the country will lose 10.5 per cent market in these three countries, Mr Rahim said.

"Kenya is Pakistan's main buyer of Irri-6 and the imposition of import duty by it has upset Pakistani exporters, he said. He said Pakistan buys 28 per cent of Kenya's total tea production. "We sell them rice at $250 a ton, while we import Kenyan tea at the rate of $2,000 per ton," he added.

Pakistan is number one buyer of East African tea by importing $164 million mostly from Kenya. The trade balance is normally in favour of Kenya. On Thursday, the price of Irri-6 in the domestic market fell by 30 paisa per kg on the wholesale market to Rs13 as a result of imposition of import duty by Kenya.

He said that Kenyan importers were requesting Pakistani exporters to cancel the contracts, while many importers were asking for delay in shipments. "Many Kenyan importers have adopted a wait-and-see attitude soon after the Kenyan authority's decision", he added.

Mr Rahim on Thursday also presided over a meeting of rice exporters to East African countries which discussed in detail the impact of increase in import duty on rice by some African countries.

It was unanimously decided that a five-member committee be formed which would apprise Prime Minister Shaukat Aziz regarding the negative impact on Pakistan's rice exports. It urged the prime minister to take all possible steps in halting the implementation of the import duty by African countries mainly from Kenya.

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