KARACHI (February 25 2004): High rice prices in Pakistan have halted exports and dealers said on Tuesday the market would rise further in the weeks ahead as demand had increased locally due to a shortage of wheat.

"Tight wheat supplies have increased rice demand in Sindh (province) traders are making good money by selling rice locally," said Haji Majeed, an exporter in the southern port city of Karachi.

"Exports will remain slow as traders are more interested in selling rice in the local market."

Supplies of wheat have fallen in southern Sindh province during the current season after domestic production fell short of the target in the 2002/03 (November-April) crop year due to bad weather.

Pakistan's wheat output was about 19.25 million tonnes in the 2002/03 crop year, against a target of 19.70 million.

Majeed said domestic rice demand had pushed prices up to a point where exporters could not match competitors offering IRRI varieties on the international market.

Another exporter said Pakistani traders were quoting export prices of $223-$225 per tonne for IRRI-6, while Thailand and Vietnam were quoting $205 and $195 respectively.

Traders in Karachi reported scattered export shipments, mainly to East Africa, adding that a few exporters were shipping old commitments but there were no fresh orders.

The main buyers of Pakistani rice are Iraq, Sri Lanka, Bangladesh and several East African countries.

Pakistan's rice year runs from April to November, but dealers said distributors were also releasing stocks slowly, hoping for further increases in prices.

Dealers said Pakistan had exported 300,000 tonnes of IRRI-6 in fiscal 2003/04 (July-June), mainly to Africa.

Exporters were quoting FOB Karachi prices of around $223/225 a tonne for IRRI-6, versus the previous week's $213-$215, dealers said.

Pakistan's new rice crop is expected to yield 4.3 to 4.6 million tonnes.

With domestic demand at 2.3 million, the government has said it hopes to see exports of 1.9 million tonnes in the fiscal year to June 30, against the previous year's 1.72 million.

Courtesy Business Recorder