and brand marketing needed to hit one billion dollar export
By AMANULLAH BASHAR
Sep 25 - Oct 01, 2000
Basmati rice exclusively produced in Punjab,
discernible from other varieties produced all over the world due to
its exotic taste and peculiar aroma, which gives Pakistan a prominent
place in the export market.
Pakistan, having an edge over other rice producers
due to this special variety of super Basmati rice, can optimise its
export earnings through value addition in the rice sector.
This was stated by Qaiser Ahmed Sheikh, one of the
top rice exporters in Pakistan, who won the FPCCI trophy for his
export performance last year. Qaiser Ahmed Shaikh, an elect member of
the National Assembly and the former president Karachi Chamber of
Commerce and Industry, feels that Pakistan could not achieve the real
value of this precious crop due to lack of processing and
international quality standards. However, the rice sector is heading
towards the target as a number of processing plants have already gone
into operation while more processing plants are in the offing.
Achieving a billion dollar export target may not be out of reach
provided the sector penetrates the export market, equipped with modern
processing equipments and professionally aggressive marketing
approach. So far we are exporting loose rice in bulk, instead of
branded small packs of 2-5-10 kgs which almost double the export
He feels that foreign investment in rice export
sector can bring speedy and outstanding results. Taking lead from this
approach his company has signed a joint venture agreement with Bernas
of Malysia for setting up a processing plant with an estimated project
cost of Rs200 million at SITE Industrial area, Karachi. This german
plant has a processing capacity of 44000 tonnes meeting all processing
requirements for grading and polishing in accordance with
international specifications. Final touches are being given to this
project which will go into production by the end of the year.
Initially, a local brand of super Basmati rice will be introduced
which would ultimately be made an international brand in the second
phase, Qaiser observed. He said that Bernas with their international
repute in the market has greatly helped making a place in the world
market and we are successfully exporting rice to Indonesia for the
last 2-3 years. Our bids scored in Indonesia over other competitors
from China, Thai land and Burma etc. He said that Iran which was a
major buyer of Pakistani rice had stopped buying from Pakistan some
three years back. They had a complaint of sub-standard and mixed
supply of rice from Pakistan. Qaiser-Noman and Bernas and some other
exporters achieved a major break-through by winning their confidence
and have been able to resume supply of Irri-92 to Iran this year.
Hopefully, our credibility and quality of product would help
recapturing Irani market.
Regarding increase in support price recently
announced by the government, Qaiser welcomed the step. He said that
growers are the spinal cord of our agriculture economy and need
encouragement to ensure a good rice crop in the years to come. Since
the increase in support price is in rupee term it may not affect the
exporters in a big way while the step would give confidence to the
growers which is of course a good sign. While calculating the effects
of rupee-dollar parity, he recalled that parity was Rs51.90 a dollar a
year back which is now around Rs58 indicating a devalutuion of 10-12
per cent. Last year the price of Basmati was Rs 350 (6.74 dollar) per
maund which is now Rs385(6.63) which the price in dollar term is
almost same as last year, hence the export sector may not affect due
to increase in support price.
Regarding the pre-shipment inspection, he said it
is necessary to ensure quality of rice to be exported. A few exporters
out of 600 had made some objections against pre-shipment inspection
which carry no significance. He expressed the hope that intervention
by Passco in rice purchase may also help stablizing local prices and
induce good feelings among the growers.
Under the new policy, the government has recently
increased the support price of paddy, raised the credit line to the
rice millers and involved Pakistan Agriculture Storage and Supplies
Corporation (Passco) in buying rice from the growers. The government
has asked Passco to start procurement of rice from Oct.15.
Accordingly, Passco will procure a total of 1.5 million tonnes of rice
from Punjab, Sindh and Balochistan. The break down of rice procurement
from different provinces, one million tonne will be lifted from Punjab
which includes 400,000 tonnes of Basmati-385 while remaining amount of
rice will be procured from Sindh and Balochistan. Under this policy,
procurement centres would be set up in14 districts of the country. A
fund of Rs1 billion has already been allocated to Passco for rice
According to a report the total cost of the paddy
procurement operation would be nearly Rs1.218 billion in addition to
Rs65.95 million as incidential charges. The districts from where
procurement centres are to be set up include Lahore, Kasur,
Sheikhupura, Tehsil Jaranwala, Hafizabad, Okara, Sahiwal, Burewala,
Bhawalnagar, Toba Tek Singh, Sargodha, Gujranwala, Narowal, Mandi
Bhauddin and district Gujrat in Punjab, Larkana in Sindh and District
Allah Yar in Balochistan.
Under this new policy, Passco would buy rice from
the growers. According to official version, the rice crisis were
The paddy price for different varieties of per 40
kg bag has been fixed as follows: Super Basmati price increased to
Rs.460 from last year Rs.425, Basmati-385 increased to Rs.3 85 from
Rs.350, Irri 6 increased to Rs205 and the prices of KS 282 TR 82, TR
83. TR 92 were increased to Rs220 from the previous Rs200.
The price of Basmati 386 was fixed at Rs240 despite
the fact that the government had discouraged the growers to gow this
quality. The price of Basmati 386 was fixed to protect the interest of
11 per cent growers. The third major decision was increasing credit
line to the rice millers to avoid resource constraints for buying
rice. He said that banks were working out the details of credit line.
Passco would help farmers in marketing the coarse variety. He said
that traders and exporters would buy rice from the Passco.
Price of Pakistani rice in the international market
had increased to $ 509 per tonne from the last years $460 per tonne as
the buyers had started vasluing Pakistani rice. The pre-shipment
inspection of all varieties of rice to ensure quality of the exporting
It may be recalled that Chief Executive Gen. Pervez
Musharraf had directed the ministries to chalk out an action plan to
resolve rice growers problems immediately to avoid any threat to
future rice crop.
A representative body of the rice growers had
called on commerce minister Razak Dawood to apprise him about the
crisis-like situation, which was developing fast in the paddy growing
areas due to slow movement of rice stocks.
The growers from rice growing areas expressed
anguish and resentment on the government policies for lifting of rice
stocks. The farmers were demanding same treatment what the government
has given to the cotton growers.
General Pervez Musharraf also met the rice growers
and millers in Islamabad to discuss problems regarding slow exports
and piling up of inventory from old crop. Problems were cropped up due
to lack of demand of local rice from the major foreign buyers,
resulting in pile up of stocks from the old crop.
Traders feel that dwindling export demand could
hurt the local market. Stocks from old crop are still around while the
new crop is about to come into market. Supplies from the new crop have
already started trickling in and arrivals were expected to peak in
Accoding to some dealers, a stock of 75,000 tonnes
of IRRI and more than 200,000 tonnes of Basmati grade rice was already
available with the mills and trade houses. They expressed
apprehensions that Basmati ordinary grade could suffer due to a slow
demand in the traditional Middle Eastern markets.
Another reason for low demand of rice is a better
crop of rice in rice consuming countries in Asia this year..