Matco Foods to belisted in September

  • KARACHI: Matco Foods, Pakistan’s largest rice exporter, is going for listing in the stock market in September this year to raise funds for its new plant in Karachi. Faizan Ali Ghori, director, Matco Foods, in an interview with The News said that funds to be received through Initial Public Offering (IPO) of Matco Foods in September would be invested on a new plant in Karachi. Matco Foods has major stakes in Basmati rice. Being the largest Basmati exporter of Pakistan, it exports to around 65 countries. “Our brand ‘Falak’ is the largest selling Basmati brand from Pakistan,” he said. Matco processes around 100,000 tons of Basmati per year. It has also been financed by World Bank’s institute IFC. Ghori, who is also a member executive council of Rice Exporters Association of Pakistan (REAP), said Matco was also going in the business of other foods, as seller of imported biscuits, wafers, rice flour, gram flour, oil, pink salt, etc, since Pakistan has one of the highest consumption to GDP ratio in the world.   He said the company was investing in the new business of organic rice glucose and organic rice protein products, which would be used by other companies, mostly in their baby products. “Majority of glucose is extracted from corn, but in Europe and the US, corn syrup is being replaced with rice,” he said. “Since rice is not genetically modified, it is least likely to cause allergy.” Matco’s plant would have capacity of 10,000 tons per year of rice glucose and rice protein, and the plant would start operations this month at a preliminary investment of Rs350 million. Another plant of this type would be established at Port Qasim in the next phase, where a land of 10 acre has been purchased and further funds would be generated from the IPO. “In the next phase, we will develop dextrin (powdered) glucose,” Ghori said. Talking on Federal Budget 2017-18, he said overseas financing for warehousing would be beneficial for non-Basmati exporters, especially those who export to African countries, where Pakistan’s IRRI rice was mostly consumed as staple food. “People can establish their warehouses there and get financed,” he said. “We will have advantage in Kenya market with it.” This was a proposal of REAP, which was incorporated in the budget. Besides African countries, China is also a big market for IRRI. “Last year, Pakistan exported 0.5 million tons to China but this year it (China) is importing from Vietnam and other countries,” he said. Matco processes Basmati in all four types; unrefined brown rice, refined Basmati, parboil (sela) and steamed Basmati. “We are using latest technology and have imported machines from Japan and Germany,” Ghori said. He said alarmingly seed development was not here, so yield was too low. Hybrid seeds provided 90 to 100 maunds per acre in the world while our production was at a maximum level of 60 maunds. “No new variety of Basmati was developed after late 80s,” he said. “A famous Basmati variety 1,121 was developed in India and smuggled in Pakistan.” Matco exports around 80 percent of its production and sells 20 percent in the local market. However, it is planning 50 percent sales in the local market in the coming 5-6 years, as “People here are saving their time of rice cleaning and more people are going towards processed and cleaned rice,” he said. He suggested that Pakistan should focus on seed development, as plant scientists in India were doing, but regretted that the Rice Research Institute was not developing any seeds on commercial level. “Our yields are lowest per acre,” he said. “Mechanical transplantation should be here.” He said REAP has been suggesting the government to allow it to use Export Development Fund to use on farmers’ education and research. Matco is growing organic rice in Punjab while lands in Golarchi, Sindh is under conversion, as it takes three years to land for the conversion for organic plantation. “We have received USDA and EU organic certification,” he said. “Last year Matco exported 300 tons of organic rice.”
  • Agriculture (2016-17) Pakistan

  • While the Finance Ministry is patting itself on the back for the decade-high GDP growth, the ‘up-to-the-mark’ performance of the agriculture sector should be taken with a grain of salt. As per the Economic Survey of Pakistan 2016-17, the growth of the agriculture sector has been 3.46 percent – in line with the target of 3.50 percent. The better performance has been due to “better harvesting of major crops through greater availability of agriculture inputs like water, agriculture credit and intensive fertilizer off-take.” This is all well and good, and overall the sector has indeed seen an improvement over last year’s negative growth of 4.97 percent. However, a look at the crop situation reveals some caveats in the story. Firstly, the growth in cotton (7.6%) and rice (0.7%) production in FY17 is not too impressive given last year’s decline (-29% cotton, -2.8% rice). Wheat production, too, only grew by 0.4 percent over FY16. It seems that sugarcane and maize have been driving the growth, which saw phenomenal increases in production of 12.4 percent and 16.3 percent, respectively. Secondly, the Economic Survey confirms what this column has been writing about over the past year: there has been a decline in the area under cotton and rice in favour of sugarcane, as well as maize. Maize and sugarcane production have seen the most rapid growth over all other crops, particularly in the most current year. This has been due to the increase in their area, which has been the highest this year in recent memory (sugarcane 7.60%, maize 12.0%). Meanwhile, the area under cotton declined by 14.2 percent year-on-year – the lowest it’s been since 1986! The reasons for this are “exceptional losses from previous year’s pest infestation and low domestic prices at the sowing time that pushed growers away from cotton to other competitive crops (sugarcane and maize).” Same is the case with rice, which saw 0.55 percent decline in area in FY17, on top of the 5.23 percent decline last year. Again, the reasons cited are “decline in domestic prices of rice which reduced the area under the crop and growers shifted to sugarcane and maize crop.” With sugarcane and maize seeming to be the only major crops driving growth in agriculture at the moment, and in fact replacing other major crops of cotton and rice, one wonder how long would this trend continue, and could it have implications on the country’s exports?
  • MoU inked to boost rice exports to Saudi

  • MoU inked to boost rice exports to Saudi
    KARACHI: Rice Exporters Association of Pakistan (REAP) and Jeddah Chamber of Commerce and Industry (JCCI) has signed a memorandum of understanding (MoU) for long-term institutional collaboration between the two trade bodies, a statement received here on Monday said. “Such visits are necessary to increase bilateral trade, commerce, and investment between both the countries and signing of this MoU would be a milestone towards achieving this objective,” Sheikh Mazen Mohammed Batterjee, vice chairman JCCI, told the signing ceremony held in Jeddah.  Batterjee also assured Pakistani rice exporters of Jeddah chamber’s full support in achieving this goal of common good.  Speaking on the occasion, Shah Jahan Malik, vice chairman REAP, said he was upbeat that after the signing of the agreement Pakistan would be able to increase its exports to the Saudi market. “The 14-member joint delegation of REAP and Pak-Saudi Joint Chamber of Commerce & Industry (PSJCCI) is visiting Saudi Arabia from 11-19 May, 2017, as part of trade promotion activities to increase export of rice to the Kingdom of Saudi Arabia (KSA),” the statement said.  It added that the delegation members visited the major super as well hypermarkets and held meetings with their top management. They also met with major Saudi rice importers of the western region, in one-on-one business networking session organised by the Consulate of Pakistan.  “After the meeting, the Pakistan consulate hosted a biryani dinner for potential Saudi buyers with an aim to promote Pakistani rice, which is equally famous for its long-grain, aroma, and taste across the world,” the press release said. Mian Mehmood, president PSJCCI, told the media that Saudi Arabia is our major trading partner in food sector and imports over $1 billion worth of rice every year. “Pakistani rice exporters should make the most of this opportunity to further increase the share of Pakistani rice in this market,” Mehmood said.   He added that the PSJCCI is playing a very vital role in promoting trade in all the sectors between the two brotherly countries.  Appreciating the initiative taken by the REAP, Shehryar Akbar Khan, Consul General of Pakistan, said the country was constantly striving to improve its technological-agricultural capacity to increase volume of its rice exports in the face of stiff competition from its competitors. 
  • Pakistan World’s Top Groundwater Exporter, India Ranks Third

  • Highly water- and energy-scarce countries like India and Pakistan are losing huge amounts of groundwater and energy because of their food exports.

    The use of standing water to grow rice in India and Pakistan leads to large water loss. Credit: sandeepachethan/Flickr

    The use of standing water to grow rice in India and Pakistan leads to large-scale water loss. Credit: sandeepachethan/Flickr

    Pakistan is the world’s largest exporter of groundwater through its grains export. India is the third largest. Going by per capita availability, Pakistan is almost a water-starved country. The parts of India from which most grains are exported are seriously water-scarce. In 2010, Pakistan exported grains that had cost 7.3 cubic km of groundwater to grow. India exported grains that cost it three cubic km to grow. India is also the world’s largest extractor of groundwater. In 2010, 75 cubic km of groundwater were extracted in India. The trifecta of groundwater depletion for water-intensive crops, grain exports and the use of electricity for mining groundwater add up to a perfect recipe for disaster. Climate change impacts are worsening the situation. The recent report that the new government in (Indian) Punjab has sought New Delhi’s permission to sell excess electricity to Islamabad has been welcomed in power-starved Pakistan. But this electricity will do much more than keep Pakistanis cool during the torrid summer. It will accelerate groundwater pumping in India. Not just precious groundwater, India and Pakistan are also effectively exporting energy when they export grains. Surface water and soil moisture also play big roles in agriculture. Many countries save this water by importing grains. For those who do not, such thoughtless export of groundwater should be the biggest worry, because the timescales for recharging groundwater are significantly longer than those for surface water and soil moisture. The sobering numbers on groundwater depletion and international food trade have been reported in the journal Nature by Carole Dalin and colleagues. About 11% of all groundwater depletion over the planet is involved in international food trade. Over two-thirds of that depletion is by Pakistan, the US and India. Food-water-energy nexus This food-water-energy nexus becomes critical in South Asia. On the one hand, water availability is already more uncertain due to climate change. On the other, there seems to be no accounting for the energy export through agricultural export, though both India and Pakistan are energy deficient countries. Though India has a huge renewable energy development plan, both countries also have major plans to generate energy from coal. That can only worsen the climate change situation. Other unintended consequences of groundwater depletion include land subsidence and saltwater intrusion in addition to potential loss of soil health. Global food supply chains are becoming more susceptible to the effects of climate change. According to the Intergovernmental Panel on Climate Change, one effect is a rise in intensity and frequency of storms. The Philippines has faced an increasing number of typhoons in recent years. Whenever one takes place, it affects food packaging around the world, because the Philippines is a supplier of coconut based food packaging material to almost all other countries. Groundwater depletion in India In India, wheat accounts for 35% of the total groundwater depletion and rice for about 25%, while fodder, cotton and sugarcane make up the rest. Average groundwater consumption to grow one kilogram of wheat is 812 litres, rice 200 litres (because it is far more dependent on surface water) and maize 72 litres, respectively. In the 2016-17 financial year, India is estimated to have exported 3,00,000 tonnes of wheat, 10.7 million tonnes of rice and 700,000 tonnes of maize. When considering grain exports, it should be noted that the actual water exported is what is embedded in the grains themselves. This is much smaller than the total water used to grow crops, of which a small fraction of the water used in growing crops is recoverable – as it seeps back down to the water table. A much larger amount of water expended is simply lost to evaporation. This loss drives down groundwater tables, and is key to understanding how water intensive crops affect groundwater in a region. Thus the water footprint is critical to monitor as far as food exports are concerned, especially for countries like India and Pakistan that face persistent domestic and international water conflicts. Even the embedded water approach employed by Goswami and Nishad points out that India exports a total water of around 25 cubic kilometres in food exports (not separated into surface and groundwater). The bad news is still that the near self-sufficiency in food production comes with a penchant to export some of it with hard-to-estimate externalities like groundwater depletion and salinisation as well as degradation of soil health and the environment. Exports of meat, sorghum and fruits are significant additional factors. India is also among the largest beef exporters and beef is easily the most water – and grain-intensive food group per calorie. International food trade is a reality of a global economy and India has no choice but to partake in it. But the unintended consequences in the food-water-energy nexus can be ignored only at grave risk to national security. State-level disparities Additional related factors for India are state-level disparities in groundwater depletion. Dry regions of Gujarat and Karnataka are exporting waters to wet regions of the country to satiate the thirst of those who can afford bottled water and soft drinks. India’s middle class continues to grow and its taste for meat and fish continues to place greater demand on water and fodder. India has taken bold steps to be part of the global community in combating climate change by committing to impressive Nationally Determined Contributions to control carbon emissions. Equally bold steps are being taken in terms of investing in renewable energy like solar and wind. India must track the energy intensity of its GDP and the carbon-intensity of its energy production. But it is clear that India must also be vigilant about the groundwater-intensity of its food production as well as the groundwater and energy exports incurred by its grain and meat exports. For its economic growth and development to be sustainable, unintended cascades in the food-water-energy nexus must be diligently avoided. Raghu Murtugudde is a professor of atmospheric and oceanic science and Earth system science at the University of Maryland and is interested in the human actions and reactions in the context of climate variability and change. This article was originally published on The Third Pole. Read original here.