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Basmati exporters facing tough competition with India

JAVED MEHMOOD

ISLAMABAD: Pakistani exporters of 'basmati' rice are facing tough competition with India in the international markets following artificial increase in the domestic prices of the commodity due to hoarding by local investors.

The Chairman of Rice Exporters Association of Pakistan, Shahzad Ali Malik, told Business Recorder on Monday that some local investors have stored 'super-basmati' rice in bulk in order "to mint profit", and this tendency has made it difficult for the exporters to compete with their traditional rivals, Indians, in the overseas markets.

A couple of months ago super-basmati rice was available at Rs 750 per 40 kg here which compared well against the domestic prices in India. But, he said, now the prices of the commodity have gone up to Rs 830 per 40 kg as the local investors have stocked huge quantities of the commodity, thus landing exporters in a difficult situation.

If this trend continued among investors, it would not only decelerate the pace of exports, but would also make the $600 million target of rice export difficult this fiscal, the REAP chief said.

He said that the investors should desist from such practice because if the rice exports suffered any blow the investors would also have its impact as they would not find buyers in the country.

Shahzad said that in the first six months of this fiscal rice exports had improved by 14.15 percent ($28.867 million). During July-December this year, Pakistan exported rice worth of $233.075 million (Rs 12.05 billion) while in the corresponding period of last year rice exports generated $204.188 million (Rs 10.20 billion).

In quantity, rice exports improved by 110,183 tonnes in six months. In the first six months rice exports, he said, performed well as the prices of the commodity remained competitive in the domestic markets. However, in the next six months of this fiscal the exports of super basmati would slow down in case the local investors continued to pile up stocks with the aim to push up prices, he said.

The Chairman of REAP said that government authorities should look into the affair of hoarding of rice in Pakistan, otherwise the exporters would not be able to compete their traditional Indian exporters in the overseas markets.