Rice exports to Iran fall 82%, India captures market

Millers seek currency swap deal to give a boost to exports.

LAHORE: Though Iran is under sanctions because of its alleged nuclear programme, basic items like food, medicines and medical services are exempted. Still, rice exporters of Pakistan are feeling the heat, not as a result of the sanctions, but due to absence of facilitation from government departments, say exporters.

A major chunk of rice exports goes to Iran as people there are fond of rice, especially Pakistan’s super basmati that is highly demanded for its taste, aroma and length.

Previously, exporters were selling 45,000 tons of basmati to Iran every month, but shipments have now shrunk to 8,000 tons, a decline of 82%. Exporters blame the absence of a currency swap agreement between the two neighbours for the sharp decline in exports.

Pakistan produces six million tons of rice per year, of which the share of highly aromatic Basmati is two million tons. Rice millers export around $2.5 billion worth of rice annually.

The Rice Exporters Association of Pakistan (REAP) says Iranian importers have started turning to India, taking benefit of currency swap and currency transfer channels under the ‘food versus oil’ regime. “India has snatched our rice market,” a miller commented.

Talking to the media, REAP Vice Chairman Sameeullah criticised the State Bank of Pakistan and related government departments for their failure to announce a clear-cut policy for rice exports to Iran.

“If the government believes that no trade is possible with Iran, it should tell us clearly and at least release the blocked payments for shipments rice exporters have already sent to Iran,” he said.

Sameeullah pointed out that the exporters tried several times to approach the governor and deputy governor of the State Bank, commerce secretary and Trade Development Authority of Pakistan chief executive to resolve the issue and get the payments released, but to no avail.

“If the issue is not resolved, we will start protesting in front of the central bank in Karachi and then take the demonstrations to Lahore,” he said. “We don’t want to knock the doors of higher judiciary, but if no solution is found, they will be our last hope.”

Published in The Express Tribune, March 22^nd, 2013.

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