13, 2012: The bearish trend seen in the global
food commodity prices over the last 6 months is
being followed by rice.
The higher prices that rice had during much of
2011 mainly due to massive flooding in Thailand;
worlds largest rice exporter, started declining
in November 2011.
From 254 in November the rice price index of
Food and Agriculture Organization (FAO) of
United Nations, started a downwards journey and
in February the index fell to an year low of
The upward revision of the global rice
production estimate done by the FAO is
considered as one of the main reason behind the
decline in the rice prices.
In addition, excess
production in India, one of the key player in the global
rice scene, also kept a downwards pressure on the price of
The latest data by the Rice Exporters Association Pakistan
(REAP) for 8MFY12 show an 8 percent increase in the total
exports compared to the same period in FY11.
Variety wise the total exports for the Basmati rice fell by
10 percent in 8MFY12, over the same period last year.
Whereas, over the same period exports of the Non-Basmati
variety rose by 16 percent.
While talking to BR Research, a representative of REAP said
that lower exports of the Basmati variety in 8MFY12, are due
to the lower yield per acre of the Basmati rice, compared to
the previous year.
He added "to compensate the lesser produce, farmers asked
higher prices, which resulted in a price differential of
roughly $200 per M.T, between India and Pakistan".
However, Pakistani exporters were successfully able to get
large contracts from the African market, which lead to an
overall larger export.
Despite improved exports, an industry member while talking
to BR Research said that "Pakistani rice exports would have
been higher by 170,000 tons if India would not have opened
the exports of non-Basmati rice".
The outlook for total rice exports in the rest of the FY12
is not that bright, as Pakistan is expected to face stiffer
competition from India, which has huge bumper crop.