Global market: Pakistani basmati may slip down the pecking order

India’s entrance and falling output threatens export of the staple.

FAISALABAD: The entry of India, the world’s largest grower of rice, and lack of research has threatened Pakistan’s basmati rice export.

Rice exports crossed $2 billion but remained below the target of $3 billion in fiscal 2012, said Taufiq Ahmad Khan former Vice Chairman Rice Exporters Association of Pakistan while talking to The Express Tribune.

India has shipped four million tons to overseas markets since lifting its export ban in September 2011 and is looking to ship another two million tons.

Pakistani rice is losing its grip in the global market due to decreasing production, said Khan adding that lack of research, high cost of inputs and a non-friendly environment created by the government is hurting the industry.

In 2008-09, Punjab produced 2.6 million tons of basmati. In 2009-10, it came down to 2.47 million tons.

The following year, it was 2.36 million tons which dropped to 1.88 million tons last year. Its share in export dropped from 1.2 million tons to just over 900,000 tons during the same period.

He said exporters are being deprived of their profit. With the loss of commercial attraction, farmers are increasingly abandoning the crop, said Khan.

In 2008-09, the variety was sowed on 3.82 million acres in Punjab. In 2009-10, area dropped to 3.49 million acres, where the variety can be sowed. Next year, it came down to 3.29 million acres, and last year it was reduced to 2.77 million acres.

The decreasing international prices have also pushed away farmers from basmati rice. The local price of the product is comparatively higher than the international market and now with India’s inclusion in the market has made it really tough to compete, Khan said.

He said that ban on rice exports to Iran due to international sanctions also contributed the country missing its target. Pakistan fetched $240 million alone from its largest export destination UAE in fiscal 2011.

India is providing subsidies to farmers and controls the prices while Pakistani growers have no support and have deal with the high input costs, he added. India farmers get subsidies in fertilisers, pesticides, electricity, fuel and seeds.

Basmati variety of rice can only be produced in certain geographical areas of Pakistan and India. Pakistani basmati rice is known as white gold in the international market. The government has failed to provide seeds and research to up the game, said Haider Ali, an expert while talking to The Express Tribune.

After adopting latest technology and variety of seeds, China is producing seven to eight tons per acre yield while Pakistan is producing a mere three tons per acre.

“Every year the cultivation land is shrinking. If this continues, Pakistan will be unable to export rice,” he added.

Published in The Express Tribune, July 19^th, 2012.