Rice exports post 57pc growth in 2009/10

[Hyde]

Rice exports post 57pc growth in 2009/10​

Tuesday, July 06, 2010

KARACHI: Pakistan’s rice exports have registered a growth of 57 percent during the financial year 2009/10, but its value declined by 30 percent on non-basmati and 33 percent on basmati rice.

Addressing a press conference at REAP office on Monday, Malik Muhammad Jahangir, Chairman Rice Exporters Association of Pakistan (REAP), said that 57 percent increase in the quantity in one year is a record in any trade. “I salute rice exporters for this achievement,” he said.

From July 1, 2009 to June 30, rice exports touched 4.60 million tons against 2.93 million tons during the corresponding period last year, registering a growth of 57 percent. However, the overall value increased by only 10.82 percent to $2.26 billion against $2.04 billion during the corresponding period last year.

Last year, REAP exported basmati rice at an average price of $825 per ton, down by 33 percent against $1,102 per ton in the preceding year. Non-basmati rice recorded a decline of 30 percent in prices to $393 per ton from $511 per ton.

Mill-owners and growers said that Pakistan received the lowest prices in the international market. REAP gave excuse of low international rates to buy cheap rice at home, a rice mill-owner told The News.

Pakistan’s rice export market increased by 31 countries in one year. In 2008/09, the country exported the commodity to 76 countries only. The number reached to 109 in 2009/10, said Jahangir.

Despite achieving high exports, he said, the government did not resolve their problems as it charged 1.5 percent withholding tax at the time of rice purchase and one percent at the time of its export.

He demanded reduction in the withholding tax along with mark-up rates on export, which was 9.5 percent for rice exporters, while textile industry still enjoyed 5 percent mark-up. “We have paid Rs2.5 billion only as withholding tax,” he said.

Increase in power and gas tariffs is another problem being faced by the exporters as the government did not allow them to generate their own electricity, he said. Rafique Suleman, Vice Chairman REAP, said Sindh is facing water shortage due to which the rice crop witnessed a delay of around 20 days, which shows less production in the province.

He said that basmati rice export was targeted to 1.40 million tons, but due to long hours power outages the exports stood at 1.05 million tons. Abdul Rahim Janoo, former chairman REAP, said that they exported not only the current crop, but also carryover from the last year.

Rice exporters said the government should not intervene in the rice trade as it hurts their business. Basmati Growers Association, a body of four members only, won the government support in trademark registration of basmati, they said.

Arif Hussain Mahesar, President, Sindh-Balochistan Rice Millers Association, told The News by phone that when Thailand was selling its non-basmati rice at $450 per ton, REAP sold the same variety at $300 per ton from February to May and gave lower rates to the mill-owners with an excuse that Vietnamese rice was available at 325 per ton.

“When Vietnam is still selling at $325, how can REAP getting $370 per ton now?” He asked. “Capitalists are operating in every sector and looking at their profit only.” Pakistanís IRRI-6 rice is as good as non-basmati rice of Thailand, said Hamid Malhi, President, Basmati Growers Association.

He said Pakistan produced around five million tons of basmati rice last year and out of this, managed to export one million tons, which was not a big achievement.The growers have a potential to increase rice production. It reached 6.9 million tons from 4.7 million tons in a span of three to four years.

Getting 33 percent low prices in the world remains a bad bargain for the growers, he said. Malhi said Pakistan and India, the only two basmati rice growing countries, could get their own prices. “But Pakistan has always kept the prices down.”

When India was selling its basmati at $1,500 per ton in 2008 under minimum export price, Pakistan sold it for $1,300 per ton despite the fact that it produces the best-quality. Categorically, Indian price also came down. “Getting the lowest price in the world is nothing to be proud of.”

Contrary to REAP’s claim that Basmati Growers’ Association comprises only four members, Malhi said that they submitted a list of 1,100 members with the trademark registrars office.“The Association is not a trade body and has not been registered with the Commerce Ministry. We are a registered body under the Companies’ Act,” he said.

Highlights

Rice exports touch 4.60m tons

Basmati rice exports down by 33pc

Other varieties fall by 30pc

Pakistan exports to 109 countries