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Loss of international rice market

Loss of international rice market -:

Why Basmati is down
Quality and forms
Pakistan Export Potential
World Rice Trade
World Rice Consumption
World price for rice

It is somewhat odd to highlight the dwindling exports of the country and moan about their trend when the government is bent upon taking credit for the increase in foreign exchange reserves and stability in the exchange rate without a proper analysis of the factors behind such positive developments.

However, some exporters, of late, seem to be voicing their concerns about the prevailing unsatisfactory conditions.

President, Pakistan Businessmen and Intellectuals Forum (PBIF), Mian Zahid Hussain, for instance, has demanded of the government to bail out the sinking rice sector otherwise the country may lose export market to India.

Pakistan exports rice, worth over two billion dollars per annum, but has been losing the export market for the last two years, landing over one thousand rice mills into serious problems and risking millions of jobs in this critical sector.

Highlighting problems of rice growers and rice mills in the country, President, Pakistan Rice Mills Association, Mukhtar Baloch also reiterated that the situation is turning against Pakistan and in favour of India which has introduced its own brands.

He revealed that 3,000 rice mills are facing problems and more than 1000 mills are on the verge of collapse that have failed to sell rice during the past two years. 0.35 million of rice bags are lying unsold in only one district and mills are unable to repay loans, adding to increased interest on past loans.

During the current Kharif season, farmers are reluctant to sow rice as they are not getting a fair price of their produce which would put the future of rice industry and agriculture sector at stake.

The observations of traders associated with rice exports would seem to be a very fair commentary on the current market conditions of an important export item of the country which has the potential to raise the value of overall exports significantly and contribute a lot to the expansion of economic activity and job creation.

However, most of the recent developments indicate very clearly that Pakistan has failed to avail the opportunity and missed the chances of expanding rice exports for one reason or the other. Rice accounted for 11.3 percent of the total exports of the country in 2009-10 but its share fell to only 7.6 percent by FY14.

The situation in FY15 is also not likely to be much different due mainly to a negative price effect in the international market. In fact, overall exports of the country are also performing very poorly this year.

Value of exports were targeted to grow by 5.8 percent to reach dollar 27.0 billion during 2014-15 due mainly to the grant of GSP Plus status, a likely improvement in the energy supplies and an increase in trade with regional partners.

However, exports have already declined by as much as 5.0 percent during July-April, 2015 compared to the corresponding period last year and such a dismal trend should give sleepless nights to policymakers of the country who still remain unfazed about the emerging situation.

The report of trading charges between the Finance Minister and the Minister of Water and Power in this newspaper on 8th June, 2015 over the impact of energy supplies on the industrial sector in a meeting chaired by the Prime Minister is of course unfortunate.

The entire government machinery, in our view, should jointly devote its energies towards enhancing energy supplies, spurring industrial growth and accelerating exports so that the country could generate its own resources to pay for the imports and eliminate its dependence on the IMF.

However, while the exporters are right in asking the government to re-evaluate its export policy framework, the businesspeople are also required to improve their performance to compete in a highly complex international market.

Of course, energy supplies and law and order situation have to be improved, a conducive taxation and customs regime has to be provided and overvaluation of the Pak rupee should be corrected but there is no reason for exporters to be complacent about the developments in the world markets and always look to the government for support.

It is hard to understand, for instance, why Pakistani exporters cannot compete effectively and have an edge over Indian exporters, when Pakistani rice and mangoes are rated relatively superior in quality in the international market.

Latest market technologies and imaginative ways could make a difference in attracting foreign buyers and raising the sales of exportable items.

A decline in exports this year is such a bad news that all the relative stakeholders need to ponder over this unfortunate development at the earliest.  



June 2015

By BRecorder Report
Source: Business Recorder

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