Competitive pricing: Rice exporters gear up to capture Indian share

As price of Indian rice rises, Pakistan looks set to regain edge in world market.

FAISALABAD:

A sharp increase in the price of Indian rice has turned international buyers to Pakistan, creating an opportunity for rice exporters to step up efforts and boost their sales in international markets.

The price of Pakistani basmati rice in international markets is $1,300 per ton, the same as last year, but the price of Indian basmati is $1,500 to $1,520 per ton.

Pakistan is the world’s leading supplier of basmati, but in the last few years it has lost its competitive edge because of price and productivity declines. However, in the face of latest developments, Pakistan could regain its edge.

In the previous fiscal year, rice exports from Pakistan stood at $1.6 billion. In the first seven months of the current fiscal year, exports have crossed the $1 billion mark.



Talking to The Express Tribune, rice exporters said the price of Indian rice had increased significantly this year, which encouraged foreign buyers to look towards Pakistan.

“We have been able to capture international markets, which were previously dominated by Indian exporters, and are supplying them with large quantities of different varieties,” said Taufeeq Ahmad, former vice chairman of Rice Exporters Association of Pakistan.

He added the Super Basmati variety had been replaced with Kainaat 1121, which was earlier exported by India. This year, Kainaat is being produced in bulk in Pakistan. He expected rice exports to cross the $2 billion mark by June this year.

Another factor contributing to higher exports is the demand for brown rice, known as Sindhi rice, which has a big market in Middle Eastern countries. “All these factors have positively impacted the country’s exports,” he said.

In the past, in a bid to capture the international markets, India has traditionally set its prices at a lower level compared to Pakistan.



The main rice producing regions in Pakistan are Punjab and Sindh. Long-grain rice goes to countries like Kenya, Madagascar, Malaysia, Mozambique and China.

Pakistan’s traditional export markets are the United Arab Emirates, Saudi Arabia, Qatar and Iran. New African markets have also been tapped by the rice exporters.

Rice yield is approximately 40-50 maunds (40kg) per acre, far less than India’s yield. Farmers believe that the government should facilitate the agriculture sector by improving seed quality, ensuring smooth supply of fertilisers with price control and incentives for the growers.

Published in The Express Tribune, February 12^th, 2014.

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