PRODUCTION OF RICE 2007-08
Mar 10 - 16, 2008
Rice target of the last Kharif i.e. during the F.Y. 2007-2008 was 5.7205 million tons, however, the production registered a decline, as compared to the target, and it was estimated to be 5.489.79 million tons. Mr. Muhammad Azhar Akhtar, Chairman of Rice Export Association of Pakistan (REAP) stated that declining trend in the production would go on in the coming years. However, production during the F.Y 2007-08 was higher than the production of rice for the year, 2006-07, which was 5.438 million tons.
The reasons attributed to this short production vis-a-vis the target were water shortage and attack of bugs and viruses on the paddy crop. It has also been assessed that the exporters will be able to achieve their set target of rice export quantity-wise and they will otherwise be gaining much more money-wise due to higher prices of the commodity in the international market.
While pointing out the reasons of possible damage to the rice crop every year, the REAP Chairman also stated that at the time of harvesting approximately 15 to 20 percent rice is damaged for want of proper equipment as farmers still use wheat cutters for harvesting rice. REAP was accordingly working on a proposal to help farmers to enhance production. The proposal was to be submitted to the Ministry of for the support of farmers
PRICES OF RICE IN THE INTERNATIONAL MARKET
As regards the international prices of rice, the price of Irri-6 is $400 per ton as compared to the previous price of $250 per ton only and price of Basmati rice is as high as $1100 as against the previous price of $650 per ton. This upward trend in prices is due to global shortage of rice production and its considerable increase in consumption.
The initial target set by the government of rice production for the year, 2007-08, as pointed out above was at 5.7205 million tons. Subsequently the government revised the target to 5.5 million tons.
One of the reasons to revise the target was the recent floods, which damaged the paddy crop in most of the areas of Sindh and Punjab, which was also affected by pest attack, hence it was not un-expected that this year's production of rice would be less than targeted.
QUALITY PREMIUM TO BE PAID TO RICE GROWERS
According to press news, rice exporters have expressed their willingness to pay 10 percent premium to rice growers. They have accordingly agreed to pay quality premium to farmers starting from the next year's crop. A meeting on this subject was held a few days back, which was attended by the representatives of Food Ministry and the members of Rice Exporters Association of Pakistan and representatives of farmers. Surely, this is a goodwill gesture and an incentive extended by rice exporters and it is likely to help both exporters and growers to achieve better results in production and export.
Rice is a dietary staple of more than half of the world's human population (mostly of Asia and Latin America). Many historians believe that rice was grown as far back as 5000 years B.C. The first recorded mention of rice is made in China 2400 B.C. Realizing the significant importance of rice, the Chinese Emperor, Sheng Nung, established annual rice ceremonies. Even today the Chinese celebrate rice by the dedication of one of the days in every New Year.
Rice cultivation is well suited to countries and regions with low labour costs and high rainfall or with adequate supply of irrigation water as it is quite labour-intensive and requires plenty of water for irrigation. Rice is the world's third largest crop after maize (corn) and wheat. Among crops grown in Pakistan, rice has predominant position. It feeds a considerable majority of our population and is a good source of foreign exchange earning.
Amongst the major rice producing countries enlisted below, Pakistan often occupies 12th position in production and 5th position as a rice exporting country. .
5- Viet Nam
6- Viet Nam
11- United States of America
13- Korea, Republic of
EXPORT OF RICE
Rice is an important export item of Pakistan. It is contributing 3.25 percent to the total share of the world rice export (2005-06). While the world total export of rice stood at 56,1090,707 metering tons, Pakistan exported 1,822,739 metering tons.
Rice is the most important exportable crop as it is a huge foreign exchange earning source besides meeting the domestic need. Pakistan holds almost monopoly in export of aromatic basmati rice with exquisite taste, flavour and length of the grain on cooking. This variety fetches three to four times higher prices than other rice varieties. An official source in the Ministry of Food, Agriculture and Livestock (MINFAL) reiterated that the Ministry had given several incentives to boost rice production in the country especially Basmati, as there is a rising demand for Basmati rice across the world, for its fragrance and good taste.
According to ERS/USDA Briefing Room - Rice Market Outlook, "Pakistan - currently the fifth largest rice exporting country-has little ability to expand rice area. Producers are facing a growing water shortage and agricultural related environmental problems. As a result, Pakistan's exports are projected to be relatively flat-about 3 million metric tons a year-over the decade."
The scribe has reasons to controvert the views expressed above by ERS/USDA Briefing Rooms ñ Rice Market Outlook. The Government is keenly interested to bring vast areas of Cholistan and Balochistan under cultivation. As soon as Kachhi Canal and other seasonal canals and small and medium dams have been completed, rice production with other major and minor crops is sure to show a momentum. Besides, MINFAL is trying to create awareness amongst rice growers to use modern methods of paddy growing like Parachute technology, which is both labour saving, time saving and economical for use of irrigation water, besides being instrumental for increasing production.
Pakistani rice export growth has been rapidly going up for the last two years. This year the exporters are expecting to achieve $1.3 billion target one month ahead. According to exporters rice is earning a handsome profit and they are expecting its total export will hit $1.5 billion in 2007-08. The rice export during 2005-06 was $1.2 billion. The prices of Basmati has surged by 35-40 percent in the international market since November, 2006. During the last Kharif, China, Thailand, Vietnam, India and Sri Lanka have been reported to have a shortage in rice production, particularly in coarse rice. This situation is beneficial for Pakistan to avail, where the production is adequate enough to export higher quantity of this staple food.
It would be interesting for the readers to note that the government of India has been selling Pakistani Basmati rice for long in the international market, labeling it as Indian brand. After a long and mysterious silence, Pakistan has served a legal notice in August 2007 upon India, seeking ban on so-called Indian Super Basmati while Super Basmati is a strain developed in Pakistan. The authorities in Pakistan raised objections last year. The Ministry of Agriculture insisted that as the strain of Basmati was developed in Pakistan, Indian authorities could not notify it as an Indian variety. It is still strange and mysterious that our Commerce department overlooked these objections allowing Indian rice traders to continue exports of our indigenous product as Indian variety. The outcome of the notice served upon India is yet to be seen, however, Pakistan Rice Exporters Association, our traders and TCP must apply full pressure upon our Government authorities to safeguard our national interests at all levels and at all forums and do not let India or any other country to be involved in any trade spat prejudicial to our genuine interests.
According to an official report of MINFAL, area under Basmati cultivation has been increased by 1489.0 million hectares and production has been estimated this year at 2666.40 million tons as compared to the total area of 1474.24 million hectares and total production of 2493 million tons in 2006-07.
Fortunately, per hectare yield has increased to cover the increasing domestic and foreign demand, from 2209 kg last per hectare to 2442 kg per hectare this F.Y.
OVERALL PRODUCTION OF RICE
Under rice cultivation in F.Y. 2007-08, a total area of 2.59 million hectares was brought under cultivation while the production is estimated to be 5.489 million tons against the target set at 5.7205 million tons, which was revised to 5.5 million tons. During the year 2006-07, according to FCA the production was 5.4 million tons from an area of 2.58 million hectares. This indicates a decline of 2 percent against the production in the preceding year, 2005-06, which was 5.547 million tons from an area of 2.621 million hectares. It was why Pakistan had a record export of 3.6 million tons valuing $1.1 billion. This helped in price improvement and better return to growers.
This year a poor shortage in production has been recorded in rice production globally. Some countries are using food grain to make bio-fuel. Rice smuggling is also affecting local prices.
INTERNATIONAL RATES OF RICE
Presently the international market rate of Irri-6 is $400 as against the previous rate of $250 per ton and the price of Basmati rice is $1100 per tons as against the previous rate of $650. The prices have a trend to rapidly increase due to the global shortage of rice production and high consumption across the world.
Discussing production of different varieties of rice in Pakistan, consumption, present trend of pricing within the country's main markets and abroad warrants another article, which will be presented separately.