Rice export: ‘Pakistan has potential of $4b but barely touches $1b’

Published: February 8, 2012

Pakistan has an export potential of four billion dollars in basmati rice but hardly touched the one billion mark, according to the Basmati Growers Association. PHOTO: CREATIVE COMMON

KARACHI: Pakistan has an export potential of four billion dollars in basmati rice but hardly touched the one billion mark, according to the Basmati Growers Association.

“Rice has the potential to become a high value asset for Pakistan’s economy but nothing has been done to add value to its production in order to harness optimal utilisation,” Hamid Malhi, BGA president, told members of the Agriculture Journalists Association on Wednesday.

On the contrary, Malhi said, rice production stagnated over the past few years and might even fall gradually if corrective measures are not taken. Farmer interest in cultivation is also low as prices have remained stagnant since 2008, he said, and a downward trend is expected in 2012-13.

In comparison, he said, India’s production and export has increased considerably. But Pakistan, which is the third largest rice exporter in the world, is under-utilising the basmati rice sector. “Production ranges between two to 2.6 million tons, while we export around one million tons.”

Pointing out the lack of innovation in the sector, Malhi said that the only available variety is extra-long grain super basmati which was introduced in 1996. “No other new high-yielding, extra-long grain variety has been introduced by public sector institutions.”

Comparing rice production in India and Pakistan, he said that India has been able to produce Basmati in areas that are categorised as “non-Basmati” areas. Four per cent of India’s total Basmati production is carried out in Punjab while the rest is grown in areas that are not naturally conducive for Basmati production, he said. In Pakistan, on the other hand, 95% of the produce is from Punjab. “This variety can be susceptible to diseases and pest attacks. Major threats to Basmati crop are bacterial leaf blight, aphids, stem borer leaf folder and paddy blast.”

Malhi said that urea prices have climbed from Rs850 to Rs2,000 in just about two years, while diesel prices stand at over Rs100 from Rs60 per litre in three years. “The imposition of General Sales Tax on inputs and high power tariffs have virtually made paddy cultivation infeasible for farmers,” he said.

He said that other production threats include minimum high-yielding non-Basmati varieties and imported Hybrid seed that could carry diseases, he said. Malhi also emphasised the need to assist farmers in provision of standard harvesting machinery, drying facilities, warehousing and credit facilities.

Retail marketing

Speaking about how exports can be improved, Malhi said that retail marketing should be prioritised by giving incentives for developing Basmati brands. Registration of trademarks and Geographical Indication of Basmati should also be pressed, he said.

But while he supported enhancing trade ties with India, he said that Basmati exports should not be allowed as it may go against Pakistan’s interests. “We will indirectly be contributing to India’s Basmati exports as it [Pakistani produce] will be re-exported at much higher rates,” he said.

He stressed on the need to add value to Basmati crop by focusing on the by-products of rice. “A lot of revenue can be generated from rice husk, tips and powder,” he said.

Reader Comments (3)

  • ayesha khan
    Feb 8, 2012 - 11:07PM

    Malhi said “But while he supported enhancing trade ties with India, he said that Basmati exports should not be allowed as it may go against Pakistan’s interests. “We will indirectly be contributing to India’s Basmati exports as it [Pakistani produce] will be re-exported at much higher rates,”

    Question: Is he saying that India can afford to pay for importing Pak rice then repackage and transport it to another country at a price high enough to cover all the costs and yet make a profit. So why is it that Pakistan cannot obtain the same price for that same rice?

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  • fahim
    Feb 8, 2012 - 11:15PM

    @Ayesha: because we have the poorest business brains, poorest infrastructure and technology to reduce costs, poorest faring techniques, poorest logistics, poorest financial sector and poorest reputation in the world. Its that simple.

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  • Cautious
    Feb 10, 2012 - 5:14PM

    Article makes it pretty clear that rising energy prices alone would disqualify this product as a legitimate source of further export. High cost and high competition are not the basis for an expanding business.

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