ISLAMABAD, Dec 5: The European Commission has withdrawn the customs duty concession on the import of Pakistani super Basmati, which is expected to result in reducing significantly the share of Pakistani rice in the European market when the decision comes into force on January 1, 2004.
Well-placed sources told Dawn on Friday that the withdrawal of facility would mean a duty of 250 euros per ton on the import of super Basmati to EU member countries, thereby making Pakistani rice less competitive in these markets.
Pakistan’s total export of rice to EU member countries stood around $53 million during the fiscal year 2002-03.
According to the sources, the immediate repercussion of the decision for Pakistan’s brown rice exporters would be that they would be left with limited time to make shipments for previously procured orders before the facility is withdrawn.
The sources said that it was necessary to provide the exporters a cushion period till end of March 2004 to cover bulk of their pending orders.
According to the sources, the decision of withdrawal of the facility was taken by the Cereals Management Committee of the European Commission that passed the regulation through voting.
According to the source, British organizations, including trade representing Indian brands, had strongly supported the inclusion of super Basmati in the concession list, but the voting system had prevailed and the regulation was passed.
“We reject the myth that super is a cheap Basmati. It is as good as India’s Taraori in taste, with only a marginal difference in price. On the other hand, it is Pakistan’s 385 and 198 varieties, which are cheap and so they do not get any preferential access. Pusa also is a cheap Basmati. So if the EU is going on the basis of price, super Basmati certainly qualifies for the concession,” the sources remarked.
They said that it was high time for the government to take the issue seriously with the authorities concerned by exerting diplomatic pressure on the EU to provide a relief to Pakistani exporters for shipment of their orders already procured.
Besides, according to the sources, the government should convene a meeting of the Rice Exporters Association of Pakistan (REAP) and other stakeholders to work out some remedial steps for lessening the impact on the export of super Basmati to the EU.
“We urgently need to make a strategy and take remedial steps, including considering taking retaliatory measures and taking the EU to the WTO on the issue,” the sources remarked.
Interestingly, Commerce Minister Humayun Akhtar Khan the other day in a press conference had said that Pakistan would strongly oppose any amendment in the rice regime that would hurt the country’s export of super Basmati to EU member countries.
The minister had said that he had conveyed Pakistan’s concern to EC trade commissioner Pascal Lamy that the EC had omitted super Basmati from the list of varieties qualifying for abatement.
Mr Khan had further stated that the EC trade commissioner had given him an assurance that the Commission would further consult Pakistan in the matter before taking any final decision.