Pakistan is known as the largest and the only
producer of aromatic basmati rice which is relished the world over for
their taste and flavor. India also produces basmati rice but much lesser
than what it is being cropped in Pakistan.
It is an irony that instead of taking advantage of
this natural gift by earning a good name for the country, Pakistan was
still campaigning for its share in the international market.
Recently, the European Commission has raised the
issue of fraud in supply of rice from Pakistan besides suspecting origin
of the commodity. There had been a number of complaints from the
European Union member states challenging the "origin" of the
rice. EC Headquarter had earlier pass a regulation to exclude Pakistani
Basmati and Kernel rice from abatement list which means withdrawal of
exemption of duty at the rate of 250 Euro per ton. This exemption from
duty gives an edge to Pakistani exporters over competing rice exporters.
Some senior officials from Ministry of Commerce
including its Secretary Kamal Afsar had visited about 8 EU countries to
defend the case. They succeeded to convince the EC for continuation of
the duty exemption.
The relief has been given on the assurances that DNA
tests on the samples will be extended to the EC for the genuine origin
of the rice. The EC's amended regulation has given the relief for those
import contracts which had been signed by December 31, 2003.
The European Commission (EC) has given temporary
relief on Pakistani super basmati and kernel rice for a period of three
months and once again including it in the abatement list.
Although Pakistan exports basmati and kernel rice to
EU member states worth $50 to $60 million, yet this market is extremely
important for Pakistan in view of future expansion of the European Union
market with the inclusion of 10 more East European countries in the club
It may be mentioned that Mexico also produces basmati
rice which only resembles to Pakistani rice in length and shape but as
far as beauty of aroma and taste was concern, the Mexican rice has no
match to the Pakistani rice because it carries neither aroma nor taste.
In order to overcome this shortcoming the Mexican farmers use perfume
spray to make it acceptable in the market.
There was a bumper rice crop in Pakistan this year
which means Pakistan was in a position to export more rice this year. At
one time, rice was the second largest export earner after textile and
had reached to the level of $700 million a year. However, Pakistan lost
a good market of its rice in Iran which was one of the major buyers of
Pakistani rice. Some exporters, instead of honoring the export
commitment had allegedly comprised on the quality of rice by mixing
broken rice and other material in the consignments. After a long time,
Iran has once again started buying rice which is a good sign for the
Some Far Eastern countries including Malaysia,
Indonesia, Sri Lanka etc. also offer a great market for Pakistani rice,
however that market is less attractive due to absence of frequent
shipping facilities in that region.
Doubt on the origin is however surprising especially
no other country produces basmati rice. There were reports that our
competitor India which produces a little quality of basmati takes
advantage of its aggressive marketing tactics as well as of its known
rice brands in the international market. It is said that some of the
Indian traders based at Hong Kong and Dubai were selling Pakistani rice
under the label of Indian brands.
Generally, rice is exported in lose form which is yet
another way of taking advantage by the brand sellers of other countries.
Now some of the exporters have introduced brands and started exporting
in small packs of 2-5-10-15-20 kg packs. It is a good sign and hopefully
the Export Promotion Bureau will provide them full support especially in
the newly discovered markets in the African, East European and Central
As far as the EU market was concerned, there were
strong indications that under Article 28, the EU was going to review its
Agriculture Policy in September this year which may help in resolving
the issue once for all.
The European Commission on December 23, 2003 excluded
Pakistani carnal and super basmati rice from the abatement list
resulting in the imposition of import duty at the rate of 250 euro per
ton. This put rice exporter from Pakistan in a difficult situation as
they could not complete in the European market against rice imports from
There seems to be a word of caution in the change of
European stance in some cases towards Pakistan exporters. Imposition of
anti-dumping duty on Pakistan bed wears was another example.
European Union had offered tremendous support to
Pakistan trade by extending significant incentives including market
accessibility, duty exemption and other incentives which greatly help
Pakistan to promote its exports to that region. These concessions were
given to Pakistan as recognition of its services in fighting against
international terrorism, especially after 9/11 incidents in the United
States. EU is very important for Pakistan and it is expected that our
business community would take special care to keep the pace of trade
relations between Pakistan and the European Union.