Pakistan losing rice export markets due to govt intervention

Pakistan losing rice export markets due to govt intervention
By Moonis Ahmed
KARACHI: Pakistan may export rice worth $3.4 billion in the current fiscal year owing to the bumper crop of all varieties if the government’s machineries stop intervention in the market, the traders and exporters said.
The country had exported rice worth $2.5 billion in 2008. “If the intervention of the Trading Corporation of Pakistan (TCP) and PASSCO were not stopped, it would be impossible to achieve the export target.” a trader said.“Pakistan is losing its share in international rice exports and may not meet its export target for the current financial year,” Abdul Rahim Janoo, chairman Rice Exporters Association of Pakistan (REAP) told Daily Times.
TCP has quoted its rates at Rs 32.90 per kilogram on January 14 for the purchase of 25,000 metric tonnes, while its market price are in the range of Rs 25.77 per kg. The corporation is paying an extra amount of Rs 178 million.The prices of basmati and non-basmati rice have increased by around 23 and 30 percent respectively, owing to government intervention in rice purchase.
Iraq, Philippine and Mauritius were the regular customers of Pakistani rice, but owing to the higher prices quoted by Pakistani traders, we have lost the market in these countries. So far these countries had officially announced tenders of 0.75 million tonnes.
REAP continues its opposition to government buying of rice via Passco and TCP Tenders, as owing to these tenders, Pakistani rice can no more compete with other origins and has lost major tenders in Iraq, Philippines and Mauritius during last week. These three countries have been buyers of Pakistani rice markets for last several years.
The association has called for cancellation of these high priced tenders as so far inaction from government has already lead to complete halt in new orders to rice exporters. This situation has lead to the closure of 70 rice export processing units in Punjab and a similar fate is expected in Sindh.
Nine basmati rice buyers in the Middle East have reneged on deals with India recently and this situation could go in Pakistan’s favor if the government play its due role by not intervening in the rice sector, he added.
The prices have dropped 28.5 percent to $1000 per tonne in the past one month owing to the global financial turmoil and good crops in India and Pakistan.