Rice exporters seek grant to sideline India in European market

  • Rice. 
    Rice exporters have sought government’s support to capture most of India’s $260-million rice business with the European Union as the 28-nation bloc has adopted a zero tolerance policy for the Tricyclazole chemical found in Indian grains. Rice Exporters Association of Pakistan (REAP) Chairman Chaudhry Sameeullah Naeem sought the assistance at a seminar organised by the association for the awareness of its members. Naeem emphasised that Pakistan could target India’s basmati rice market in the EU following upcoming application of stringent policies by the bloc to the presence of hazardous pesticides in the commodity. From January 1, 2018, all countries that export basmati rice to the EU must bring down the maximum residue limit for Tricyclazole to 0.01mg per kg. Until now, the EU has been accepting 1mg per kg in rice shipped from different countries including India.
    ‘Made in Pakistan’ expo planned in UK   Naeem suggested that Pakistan could enhance rice exports to the EU from 150,000 tons to 350,000 tons by grabbing Indian exports of 200,000 tons which may be stopped due to the strict regulations. Tricyclazole is a fungicide used by Indian farmers over more than 70% of basmati crop. But Pakistani farmers do not use such chemicals to protect their produce. “Basmati varieties grown in Pakistan do not require the use of fungicide and we can gain from the restriction on Indian exports,” Naeem said. India exported around 350,000 tons of rice worth $260 million to EU countries in the previous fiscal year. Of these, 70% had 1mg per kg of Tricyclazole. He pressed the government to announce a grant to help promote Pakistani rice in the international store chains. “Pakistan’s brand can get space by replacing Indian basmati in renowned mega stores of European states with financial support of the government,” he said. “This presents an opportunity to grab India’s market share because it will take at least two cycles to reduce the consumption of Tricyclazole.” Naeem pointed out that basmati rice exports had been facing stiff competition from India and decried that lack of research and unavailability of new seeds had resulted in low productivity. “High input costs have made Pakistan’s basmati totally uncompetitive,” he said and urged the government to extend financial support to the second biggest export sector in order to enable them become price competitive and bridge the widening trade deficit. “Rice is the second biggest export sector after textiles but it has always been ignored by the government,” he remarked. The Main Dish Thomas Unger of Eurofins Global Control GmbH, while discussing the challenges faced by the exporters of rice to the European market, said Pakistan had a huge potential but the exporters should pay attention to meeting specifications of the importers. “Rice exports to European countries are picking up, but exporters should pay attention to issues like aflatoxins, pesticide residue and new regulations being put in place by these markets. However, complaints of aflatoxins in rice consignments from Pakistan have dropped to almost negligible levels,” he added. Published in The Express Tribune, November 17th, 2017.
  • 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.”
  • REAP threatens to shutdown mills from tomorrow

  • Rice Exporters Association of Pakistan (REAP) has announced to shutdown rice mills from Monday if the goods transporter strike issue persists. Addressing a press conference here on Saturday at Karachi Press Club, Mahmood Moulvi Chairman REAP has shown serious concern over the goods transporters' strike said due to the recent transportation problems, all exports have almost come to halt. He said that all the stakeholders of export trade are facing huge financial losses and now compel to stop operation aimed to reducing losses. Although, transporters are on strike from the last few days, the federal and provincial governments' authorities are not handling the matter properly. "The country's overall and particularly rice exports are already facing many challenges in the world market and declining sharply, while now the transport strike is further damaging the exports", he added. In the current situation, when mills are processing rice but failed to dispatch the commodity due to transports' strike, rice millers and exporters have decided to shut down their mills aimed to minimise losses, the chairman REAP said. Rice exporters have no other option except to go on strike and close their rice mills till the problem resolved. He has appealed Prime Minister Mian Muhammad Nawaz Sharif, ministry of commerce and Chief Minister Sindh Syed Murad Ali Shah to intervene in the matter and resolve the issue on top priority basis as all import and export trade activities are halted because of goods transporters' strike. Rafique Suleman former chairman REAP said that all traders respect the court's decision, but there should some way out to resolve the issue. He said that as the imported goods are not being released from ports due to strike, the both ports Karachi Port and Port Qasim will be completely packed in next two days making the import and export impossible due to congestion. He said holy month of Ramazan is also approaching fast and this is the time to supply commodities in different parts of the country. Markets may face shortage, if immediately supply will not be restored, he added. In addition, the delay in exports consignments may also resulted in cancellation of export orders mainly as buyers could not bear the late supply. He said that while the Prime Minister and federal ministers are making efforts to enhance the exports to earn more foreign exchange for the country, the strike is directly hurting these efforts. Former chairman said that there is need to devise a proper policy for the movement of heavy transport in the city to end the issue that is directly hurting the country's economy. On the occasion, Anwar Mian Noor former chairman REAP, Safdar Mehkari and other leading exporters were also present.
  • Rice exporters eye big deals in Saudi Arabia

  • ISLAMABAD: Rice exporters of Pakistan are expecting to fetch big deals in Saudi Arabia during their visit to the Kingdom from May 11 to 19. A 14-member joint delegation of Rice Exporters Association of Pakistan (REAP) and Pak-Saudi Joint Chamber of Commerce and Industry (PSJCCI), headed by Shah Jan Malik, vice chairman of REAP, is visiting Saudi Arabia as part of the trade promotion activities to increase exports of rice to Saudi Arabia. According to the Consulate General of Pakistan, Jeddah, Shehryar Akbar Khan, consul general of Pakistan, has appreciated the initiative taken by the rice exporters of Pakistan, and expressed the hope that these measures would support Pakistan’s efforts to increase rice exports to the Kingdom. He said the consulate is making an extensive programme for the delegation, which includes meetings with Makkah and Jeddah chambers, business-to-business networking session and meetings / visits to the leading supermarkets and hypermarkets of the western region. Pak-Saudi Joint Chamber of Commerce and Industry president Mian Mehmood said Saudi Arabia imports over $1 billion worth of rice every year, making great opportunity for REAP to further increase exports. The joint chamber is playing a very vital role in promoting trade in all the sectors between the two brotherly countries, he added. Jeddah Chamber of Commerce and Industry (JCCI) vice chairman Sheikh Mahzen Batterjie has welcomed the visit of the delegation and said such bilateral visits are necessary to increase the bilateral trade, commerce and investment between the two countries. The delegation members expressed confidence that they will meet their objective and the visit will be fruitful. They said there is tremendous scope for the export of Pakistani basmati to Saudi Arabia because of its supreme quality, unique aroma and taste.  This is the reason why Pakistani basmati is very popular worldwide, including Saudi Arabia. REAP has been making efforts to promote Pakistani rice, which has resulted in exponential increase in the popularity of the produce across the world, the delegation members added.
  • Rice export blues

  • Rice exporters seem to be in deep trouble, as the latest PBS numbers spell out disaster; for the eight months ended FY17, Pakistan’s total rice exports are down 11 percent year-on-year to $2.41 billion. It is pertinent to mention here that rice is Pakistan’s second-largest export earner, after textile.
    For 8MFY17, Basmati exports are down 13 percent in quantity and a whopping 17 percent in value. As for non-Basmati, exports are down11 percent year-on-year in terms of volume, and14 percent in dollar terms.   Rice-a


    This column has highlighted the falling Basmati exports numerous times in the past (Read: “Low price weighing down rice,” published June 22, 2016). However, now it’s the non-Basmati variety that has become a cause of concern. This decline is a relatively recent phenomenon, as Pakistan had been doing exceptionally well to capture markets for its cheaper, non-Basmati varieties of rice in FY16. Indeed, the once booming non-Basmati varieties are now suffering the same fate as their premium counterpart.
    A well-placed source from REAP told BR Research that the main reason for the decline has been a higher price; local stockists/middlemen have been hoarding rice and shoring up the price. Now Pakistani rice is around $25-30 more expensive than Thailand or Vietnam. Rice-b
      Furthermore, there has been a drop in the quality of this rice as well; where previously the non-Basmati rice was 35-40 percent broken, it is now around 50 percent broken. One ray of hope is that banking channels with Iran are finally opening up and Basmati is showing some signs of improvement. For the month of February, Basmati exports inched up by 25 percent over last year. The source added that Basmati rice is now getting a better price and the reopening of Iran could bring much-needed reprieve for the industry.