RICE EXPORT FROM PAKISTAN

Can it join one billion dollars club?

By SHABBIR H. KAZMI
Oct 06 - 12, 2003

Pakistan is among the five largest rice producing countries of the world. The country not only produces quantity, which is far higher than the domestic consumption but also cultivates a variety, Basmati, that is liked the most. However, Pakistan's share in the global trade of rice is far lower than the potential enjoyed by the country. Low exports are due to inconsistent government policies, inability of local exporters to market the commodity in the international markets and above all failure of exporters to deliver the agreed quality. Lately, the Rice Exporters Association of Pakistan (REAP) has expressed its intention to achieve the target of one billion dollars over the next couple of years.

Production of rice in Pakistan has been adversely affected due to near-drought situation in the country during last three years. Not only that area under rice cultivation declined but production was also lower. This naturally caused decline in export of rice from Pakistan. The country achieved a record production of nearly 5.2 million tonnes of rice during 1999-2000. This was due to reasons 1) cultivation of rice over 2.5 million hectares and 2) a record yield of 2,050 kilograms/hectare. Year 2001-2002 was the worst as the country succeeded in achieving production of 3.9 million tonnes. During the year not only the area under cultivation declined to 2.1 million hectare but yield also plunged to 1,836 kilograms/hectare.

PRODUCTION OF RICE

 

(Quantity in 000 tonnes)

1998-99

4,674

1999-00

5,156

2000-01

4,803

2001-02

3,882

2002-03*

4,478

*Provisional

There are three main varieties of rice in the world 1) Indica (long grain), 2) Japonica (round grain) and 3) Javanica (medium grain). Long grain variety is grown in the warm climate belt that includes Indochina, Thailand, India, Pakistan Brazil and southern USA. The second variety is mainly cultivated in cold climate countries that include Japan, Korea, northern China and California state of USA. The third variety is grown mainly in Indonesia.

The rice grown in Pakistan falls in the category of long grain. The varieties grown in the country can be broadly divided into two categories: Basmati and non-Basmati. Basmati varieties are supreme varieties due to their qualities like good aroma, elongation, integrity and non-stickiness. Basmati varieties grown in the Punjab province include Superb Basmati, Basmati-385, Basmati-2000 and Shaheen. Non-Basmati varieties grown in the Sindh province and Balochistan mainly comprise of IRRI-19 and KS-282.

During year 2000 the global export of rice was around 23.5 million tonnes. Out of this Thailand enjoyed the largest share of over 6 million tonnes. The second largest exporter was Vietnam with an export of nearly 3.5 million tonnes. Pakistan exported about 2 million tonnes and India's share was 1.5 million tonnes. Pakistan and India are in close competition with each other in global trade of rice. The rice exports from both the countries consist Basmati and non-Basmati. Pakistan's share in global export of rice was around 9% during the year.

Export of rice from Pakistan is dependent on supply-side management and proactive export marketing. There should be adequate supply of water, agriculture inputs and most importantly certified seeds. The country must also have adequate and superior quality storage facilities. As regards export marketing, one can only say that neither the government nor the exporters have been able to market it premium product, Basmati, in an effective and efficient manner.

At one stage only Rice Export Corporation of Pakistan was allowed to export rice, exporting mostly in bulk. Then private sector was allowed to export rice but only in small packing. The policy didn't allow marketing of branded rice. Our competitor exploited the situation. They purchased Pakistani rice in bulk and marketed it with their own brand names. While Pakistan was exporting rice at lower price the same was being sold at high premium in the same markets. During that period two complaints were common 1) presence of undesirable foreign materials and 2) much higher than specified percentage of broken rice.

Lately government has allowed the private sector to export rice. Private sector is said to be making its best efforts but has not achieved much. The prime reason being that they have restore the lost confidence of buyers and it may take some time. Some of the Pakistani exporters have succeeded in establishing their brand names in the international despite the least support by Export Promotion Bureau (EPB). Rice exporters should learn from the past mistakes by strictly following the health regulations and abiding by the agreed percentage of broken rice.

Rice is a water intensive crop and its production in the country declined over the last few years due to inadequate supply of water. However, the supply has improved substantially lately and quantum jump in production is expected. Exporter must get ready to export the surplus quantity and the EBP must help the REAP in achieving the target of one billion dollar export of rice.

EXPORT OF RICE

 

(Quantity in 000 tonnes)

 

2002-03

2001-02

Basmati

710

550

Non-Basmati

1,058

1,134

Total

1,768

1,684

 

(Value in million dollars)

 

2002-03

2001-02

Basmati

359

258

Non-Basmati

187

190

Total

546

448