Amid the euphoria of India clocking the highest ever agriculture exports of over $50 billion in FY22, basmati rice, one of the country’s oldest anchors in farm exports, seems to have fallen off the radar screen. For the third consecutive year, basmati rice exports saw a fall over the previous year in value terms, according to provisional figures. In 2021-22, India exported basmati rice worth $3.53 billion, the lowest since 2019-20. What has brought about this fall and could there be a way to resurrect this vital farm export from India? Though India is still the world’s largest exporter of basmati rice and its long-aromatic grain, smooth texture, and special qualities have made it one of the most signature food items of the country, the continued fall in export should merit a deeper introspection. Experts said the reasons were multiple, including the loss of some traditional markets like Iran, fungicide problems in the European Union, and a drop in acreage due to equal or even better returns from competing rice varieties. “There is a rise in domestic demand for basmati rice while in some areas due to increase in minimum support price, the basmati acreage has been overtaken by non-basmati rice, which is contributing to the fall in exports,” M Angamuthu, chairman, Agricultural and Processed Food Products Export Development Authority, said. In a paper presented last year, S Chandrasekaran, leading trade policy analyst and author of the book Basmati Rice: The Natural History Geographical Indications, wrote the price difference between basmati rice and common rice in 1940 was 569 per cent, based on British India documents. Between 1995-96 and 2020-21, the price difference between the minimum support price of fine paddy and basmati rice has fallen from 153 per cent to 20 per cent. “If the price difference of traditional Basmati rice and fine paddy varieties had been maintained to an appropriate level, the farmers may not have adopted evolved Basmati rice varieties. Now Minimum Support Price of Fine Paddy varieties are inching to find equilibrium with Basmati paddy price. This could be the point of no return in view of niche status, if it converges,” Chandrasekaran wrote. Sources say in the past two-three years around 20 per cent area has shifted from basmati rice to non-basmati rice in the main producing states of Punjab, Haryana, and the foothills of the Himalayas due to reduced price differentials. “Another reason for this slowdown in exports has been the stopping of purchases by Iran (one of the big markets for Indian basmati) due to US sanctions, which is a straightaway annual loss of almost 1.2 million tonnes,” Chandrasekaran said. He said basmati sales to the EU, which used to be 500,000 tonnes a year, had dropped to 150,000-200,000 tonnes due to rising problems related to high levels of fungicide. PUSA-1121 (which is one of the most common basmati rice varieties produced in India) does not qualify for duty rebate from the EU. Much of this market is slowly shifting to Pakistan, India’s primary rival in the global basmati trade. “In the past two years, the overall global markets were down and basmati rice, being a premium product purchased by niche consumers, will find fewer takers than mass items do,” Chandrasekaran said.

The price of 1121 variety of basmati rice has witnessed a considerable jump in the open market in Haryana, fetching up to Rs 1,061 per quintal more compared to last time. On Monday, a rice grower from Sheria village in Jhajjar district sold his produce for Rs 4,561 per quintal at the grain market here even as private traders had bought it for maximum Rs 3,500 last year. “We sow 1121 variety of basmati rice over 20 acres every year and store about 150 quintal for subsequent sale. Even we hadn’t expected this much gain,” said an ecstatic Naveen, the rice grower. Bhartiya Vyapar Mandal vice-president Harsh Girdhar cited several reasons for the high rates, including decrease in 1121 basmati sowing area, new markets in Iraq and Iran and global grain crisis due to the Russia-Ukraine conflict. He said rice growers had been storing some portion of their produce to sell it during off-season when it fetched higher returns. “The area under PR variety of rice, procured by the government on the MSP, rising considerably last year was another factor behind the hike in the price.”    

Rising prices and inflationary pressure have pulled down demand for branded basmati rice, cooking oil and chicken by up to 15% in March compared to the same time last year. Russia's invasion of Ukraine that started in last week of February has seen global commodity prices surging as supply chain was disrupted. Global prices of basmati rice had gone up by $200 per tonne since the war started. "The impact of global price rise is also being felt in the domestic market. This has tapered the demand in the Indian market. It is down by 15 per cent. We are seeing that people are shifting to regional rice varieties, which are comparatively lesser priced than basmati," said Gurnam Arora, joint managing director, Kohinoor Foods that sells basmati rice under the Kohinoor brand name. Even prices of regional varieties of rice have seen a price hike as export demand is robust.  

Latin American countries Cuba and Chile have expressed interest to purchase Basmati rice from Haryana. For this, a delegation of Cuba will visit Haryana next month. While giving this information on Saturday, a spokesperson of the Foreign Cooperation Department said the chairman of HAFED  Kailash Bhagat, managing director A Sreenivas and adviser to the department of foreign cooperation Pawan Choudhary held a meeting with Ambassador of Cuba to India, Alejandro Simancas Marin and Ambassador of Chile, Juan Angulo to discuss mutual cooperation with Haryana in various fields. During the meeting, Cuba and Chile have expressed interest to procure Basmati rice from Haryana. In addition, opportunities for cooperation in information technology, pharma and aviation will also be explored by Cuba. Therefore, a delegation from Cuba will visit Haryana next month. The export graph of the state will increase with the purchase of Basmati rice from Haryana by Cuba and Chile and the trade and bilateral relations of Haryana with these countries will also get strengthened, the spokesperson said. He said  the Ambassadors of Cuba and Chile also appreciated the thinking and vision of the Chief Minister Manohar Lal and said the initiative taken by the Chief Minister Manohar Lal Khattar for Heart to Heart Connect relationship is unique and commendable in itself. The Ambassador of Chile,  Juan Angulo said,”We are already working closely with the Government of India and we are glad that Haryana has contacted us. Certainly Cuba will take forward its relations with Haryana,”. The spokesperson said that the Haryana Government is continuously making consistent efforts to promote bilateral relations with other countries. In this episode, Haryana-Africa Conclave Series-1 was organized with African countries and a meeting was also held with the delegation of Latin America and Caribbean countries on March 27, 2022 at Surajkund, Faridabad, in which delegations from 11 countries had participated.

It’s the season of new records. Pakistan’s rice exports breached 3 million tons during the 8-month period ending February-22, a first in at least 12 years. If exporters are able to maintain the monthly run rate of 0.4 million tons between Mar-June, final export tally for FY22 may touch 4.5 million tons. That would be 10 percent greater than Pakistan’s highest-ever export volume, last achieved in FY16.

Unsurprisingly, higher export earnings have accompanied the quantum jump in volume. However, while export volume rose by 22 percent, dollar earnings only rose 15 percent. As BR Research has previously highlighted, rice is the only major cereal which has remained immune to the charms of ongoing global commodity price boom, leaving Pakistani exporters at a disadvantage so far.

According to the data released by PBS, rice exporters fetched 5.5 percent lower prices on average during Jul ’21 - Feb ’22, compared to the same period last year. Unit price for exports of both rice categories fell during 8MFY22, with average export price for basmati declining 11 percent, while coarse prices fell 6 percent versus the previous year. Nevertheless, full year earnings against rice exports may yet clock in above $2.1 billion, nearly three percent higher than last year. Interestingly, bulk of the jump in export value has emanated from basmati category, which added $80 million in incremental earnings over the previous year. Basmati export volume rose by 37 percent during the 8M period, but still remained significantly lower than the year earlier (FY20). Full year basmati exports may reach 0.7 million tons, only third-highest during last decade.

Market watchers will appreciate that growth in basmati exports remains the key to unlocking country’s the cereal’s export potential. Historically, basmati export has fetched 2x the unit prices in international market than coarse varieties. Pakistan’s basmati export potential is estimated at 1 million tons per annum – one-fourth of total world basmati market – yet has remained conspicuously shy of that goal due to uncompetitive pricing relative to Indian exporters until recent past. However, another risk to basmati export thesis now looms large in near-term. According to preliminary data, Pakistan’s basmati production has fallen short by 10 percent during kharif FY22, clocking in at 3.7 million tons against 4.1 million tons the previous year. This is despite news of national rice output kissing a fresh record of 9 million tons during the ongoing year, primarily driven by record yields in coarse varieties. Wherein lays the rub. Local consumers remain fond of basmati rice – which is also one-third more expensive (on average). It bears emphasis that up to 80 percent of Pakistani basmati feeds into local consumption, whereas nearly 75 - 80 percent of coarse varieties (both IRRI and hybrid) – are exported. This implies that the decline in basmati output during the current year may inadvertently impact the exportable surplus.

Ordinarily, this would not make news, except that it comes at a time when the country is all set to witness a significant wheat shortfall. Naturally, basmati is Pakistani’s second favorite cereal after wheat flour, and a basmati surplus could have very-well come in handy to fill Pakistani stomachs in case wheat prices ran amok. Although rice and wheat prices have historically not shown any correlation in at least the domestic market, 2022-23 marketing year shall offer interesting insights into the extent of substitution effect between the two grains. Especially, if basmati prices come under pressure locally, while maintaining their prevailing calm in the international market. Whether consumers shall switch to the cheaper coarse rice also remains to be seen, especially given the strong distaste local palate has for IRRI/hybrid rice.

Meanwhile, will traders reduce basmati export volume to cater to greater domestic demand or not will be another curious event. Or, will they aggressively chase exports, raising prices back home? Interesting times ahead.

White, translucent or pale brown – find out which is the best

KARACHI: The retail prices of various varieties of rice have been increased by up to Rs40 per kilo almost a month before Ramazan. Traders claim that the prices have been raised due to rise in exports and high transportation cost. The retail price of medium quality basmati is now Rs200 as compared to Rs160 per kg while normal basmati is selling at Rs150-160 instead of Rs120-130 per kg. Premium basmati is now priced at Rs250 per kg. A biryani shop owner said he had to pass on the impact of price hike of at least Rs10 per plate to customers as he was compelled to procure basmati Sella rice at Rs20-30 per kg higher rate from wholesale markets. He said he sold a biryani plate at Rs130. “Some other outlet owners are selling at Rs140 per plate depending on the area.” In bigger food shops, premium basmati rice biryani (double plate) is being sold at Rs300-330 and single plate at Rs170-200. While it is not easy for a buyer to judge the quality of rice in biryani, traders and biryani restaurants take full advantage of this ignorance by mixing various varieties. General secretary of the Karachi Retail Grocers Group (KRGG) Farid Qureishi said that price jump in basmati and other varieties of rice was not a matter of concern for the rich who continued to buy expensive commodities without any problem in higher quantities for monthly consumption. He said, however, the lower and middle income groups, who are hit hard by rising food inflation and utility bills, had been limiting their buying as per their requirement. A member of the Rice Exporters Association of Pakistan (REAP), Anis Majeed, said that despite a drop in transportation cost after Rs10 reduction cut in fuel rates on March 1, rice prices had been soaring owing to previous massive hikes in transportation cost because of diesel and petrol rates. He said exports were in full swing, thus putting pressure on local prices despite the fact that exports were made at a very low wholesale rates. Rupee devaluation against the dollar is certainly benefiting exports. Pakistan’s rice production is over seven million tonnes per annum in which exports have been hovering between 3.5 and four million tonnes while the rest is consumed domestically. Export destinations are Europe, Gulf countries, Australia, US, China, African countries, the Far East, etc. According to figures of the Pakistan Bureau of Statistics, basmati exports rose by 41pc and 414,190 tonnes of rice were exported in seven months of fiscal year 2022 from 293,761 tonnes in the same period of the last fiscal year. In terms of value, it is a jump of 28per cent, i.e., $362 million from $282 million. Other varieties of exports grew by 13pc, 2.138m tonnes from 1.886mn tonnes, while it went up by 5.56pc in terms of value, $924mn from $876mn, in seven months of fiscal year 2021. Mr Anis said due to massive hike in freight rates and lack of availability of shipping containers, rice exporters had chartered two to three bulk vessels destined for African countries in the last three months to load rice cargo in these vessels. Each vessel had carried 35,000-40,000 tonnes of rice. Besides, demand from China for Pakistani rice also remained high. In financial year 2021, export of other varieties had plunged to 3.062 million tonnes fetching $1.465 billion as compared to 3.3 million tonnes valuing $1.39bn in FY20. Basmati exports earned $575 million from 629,069 tonnes in FY21 from 865,949 tonnes earning $783mn in FY20. Rice exports in FY21 remained subdued due to low price offered by India for non basmati and higher freight charges from October 2020 amid Covid-19 pandemic. However Chinese buying of Pakistani non basmati rice kept the exports moving.

Pakistan’s Basmati rice exports grew by 8.97% month-on-month to $58.086 million in January 2022, as compared with $49.161 million in January 2021, WealthPK reported. The country’s overall monthly rice exports declined by 8.40% and remained at $220.078 million in January 2022 compared with $240.264 million in December 2021, according to Pakistan Bureau of Statistics (PBS). The country’s overall food group exports in January 2022 were $471.500 million as compared with $533.565 million in December 2021, showing a decrease of 11.63%, reported WealthPK. On a year-on-year basis, food group exports increased by 14.31%  

Monthly foreign trade report card for May 2021 is full of surprises. Rice exports, which were expected to chart fresh heights on the back of global commodity price boom, have fallen by nearly half to almost a hundred thousand dollars for the month. In fact, monthly rice exports are second lowest in at least 32 months, even lower than the low base effect from last year May that coincided with peak pandemic period. Although trade performance during a single period is never sufficient to extrapolate long-term trends, much of these developments have been long in the making. Readers will recall that rice exports were hailed as a saviour – after textiles – for Pakistan’s dismal export performance just two years ago. There is little doubt that Pakistan’s rice export rebounded substantially post massive currency depreciation circa 2018-2019, the recovery in export volumes was always bound to run out of steam. Here is why. As most commoditized goods exports go, Pakistan’s rice processors also benefited from the newfound price competitiveness following currency depreciation. Although total export volume remained annoyingly stubborn at 4 million tons per annum, quality of exports improved. Export mix began to shift back towards high value basmati rice, which are valued nearly twice in unit price than the coarse rice variety that forms bulk of total exports (over 80 percent of volume, and 70 percent of value). But after two years of bull run, the recovery witnessed in basmati exports is stalling. A deeper dive through granular data points to two possible explanations for the replay of basmati stagnation. First, the global basmati export market (excluding subcontinent) is sized at roughly 5 million tons per annum, mostly consisting of Iran, Gulf, and desi diaspora in North America and European continents. Historically, exporters based out of India have had a commanding export market share, averaging over 80 percent.

Unlike Pakistan, basmati is not considered a staple rice variety in India, especially outside of north Indian states. Thus, India produces a much larger exportable surplus of basmati, and has long established internationally recognized brands. In fact, basmati exports contribute 60 percent of total rice export earnings for the neighbour, whereas the figure stands at just one-third for Pakistan. Indian exporters also enjoy better price competitiveness (although Indian-origin basmati has witnessed bans by EU due to high tricyclazole levels in recent years). Thus, despite its high-unit value potential, Pakistan’s basmati exports face a natural ceiling due to limited demand from exporting destinations, and dominant competitor market position. But there may be another centrifugal force at work, that’s limiting the upside potential of basmati exports. While basmati’s export potential is often celebrated at the policy level, as much as 80 percent of total basmati rice produced domestically is geared towards local consumption. Moreover, the trend towards local consumption has only been inching forward in recent years, rising to as much as 85 percent in FY21. Although basmati may have long been a national favourite for biryani and pulao, it appears that exogenous variables may also be driving increasing local demand for the variety. For one, growth in production of Pakistan’s staple cereal crop – wheat – has remained stunted, and has failed to keep up with rising domestic population. Two, although globally rice is considered an inferior grain to wheat, that’s not the case for basmati, which is considered premium due to its aromatic qualities. Three, although basmati may be more expensive, but low-mechanization means that the harvested crop is often of poor quality and has a high share of rice in broken form, that sells at lower price points in domestic market, but has little foreign demand. And finally, while the per unit price of rice may be higher than that of wheat flour, one kilogram of cooked rice feeds as many as 10 – 15 people, much higher than the number of flatbreads that may be prepared by a kilogram of flour. Turns out as Pakistan’s population grows, rice – specifically basmati – is fast becoming the more affordable cereal. Meanwhile, the static export volume of coarse rice varieties keeps the illusion of rice export potential alive. But if coarse rice is cheaper than basmati, why does it not substitute basmati in local diet? Two reasons. While coarse rice output consists nearly half of national rice production, it is actually grown using imported varieties that are alien to local tastes and food recipes. Three-fourths of domestic coarse rice production takes place in the saline backwaters of Sindh, where basmati cannot be grown. Instead, hybrid rice is deeply popular in the southern province due to its high yielding varieties that have earned better profits to farmers over last two decades due to demand by exporters. Meanwhile, while domestic basmati demand may be rising, the variety can only be grown in Punjab province due to unique soil and climatic conditions required. This means that basmati – which is already a low-yielding expensive crop – has limited cultivable area available to it. What does this mean for rice export performance? Mainly that while the “unexploited potential of basmati exports” may look like a not-to-miss opportunity, higher domestic demand will keep it from ever reaching fruition. Although massive currency devaluation during 2019 made basmati export highly lucrative, that may have been a fleeting opportunity that has since disappeared, especially due to rising domestic prices. Like all businesses, basmati processors are opportunistic traders, who took advantage of better returns in international market due to currency volatility two years ago. But they may have little reason to continue selling to high maintenance, foreign buyers when the voracious appetite of domestic buyers remains unsatiated.

Export inspection body checks rice exports for residues of 22 pesticides

  ISLAMABAD: After a lapse of around 18 years, Pakistan on Monday finally approved and notified geographical indication (GI) rules to protect its domestic products in the international market. The rules were approved in a fast move after the country was caught unaware when India applied for an exclusive GI tag to Basmati rice in the European Union (EU) in September 2020. Pakistan was also facing registration issues regarding domestic products in the international market as local items were not protected through the GI law. As per the approved rules, a copy of which is available with Profit, at least 79 products, including Basmati Rice, Khanpur Khwa, Bahawalpur Chunri, Bhakkar Karna Oil, Khewra Pink Salt, Chitrali Embroidery, Hunza Apricot, Sukkur Dates etc., have been protected through the GI law. “GI identifies agricultural, natural and manufactured goods originating, manufactured or produced in a territory, region or locality as determined by the country, where a given quality, reputation, characteristics, ingredients or components are essentially attributable to its geographical origin,” the rules stated. “In the case of manufactured goods, the production, processing or preparation of the specified product takes place in a certain territory, region or locality.” To implement GI rules, the concerned division shall establish a GI Registry under the management and control of IPO Pakistan. Trademarks Registry and its branches established under the Trademarks Ordinance, 2001 (XIX of 2001) shall carry out functions of the GI Registry and its branches till a separate GI Registry is established under the said Act. The rules include the procedure of application, assessment, conformity of GI with a book of specification, opposition to the application, duration, renewal, removal and restoration of registration, infringement of GI, grant of certificate, prohibition on transfer etc. Apart from the registration of domestic products, the GI rules also define law about registering foreign GI. As per the rule, a geographical indication of a foreign country shall be registered in Pakistan as long as it is registered in accordance with the local legislation in its country of origin. The title and date of the legislative or administrative provisions or of judicial decisions regarding protection to the geographical indication in the country of origin shall be considered for accepting foreign GI application. The registry shall not allow the registration of a foreign GI which is not or has ceased to be protected in its country of origin, or which has fallen into disuse in that country. The application for registration of foreign GI shall be made at the registry by its legal representative in Pakistan. During the registration procedure, the registry may require the applicant or legal representative to submit information related to registration in the country of origin which may affect its registration in Pakistan. It may be mentioned here that a product has to be protected under the GI laws of a country before applying for registration for the protection of any product’s GI tagging. Earlier, there were no rules of the GI Registration and Protection Act 2020, enacted in March this year, which was why Pakistan’s basmati was not a protected product. India’s claim to Basmati was challenged earlier this month, with Pakistan arguing that basmati rice was a product of both India and Pakistan.

 Rice export prices in Thailand this week hit their highest in more than six months and Vietnamese rates held on to nine-year highs, although traders in Hanoi expected purchases from Cambodia to ease shortages. Thailand's benchmark 5% broken rice prices rose to $516-$520 per tonne, their highest since June 11, from $500-$519 last week. Traders said lower supply has supported prices in the domestic market. Demand remained quiet as the market speculated buying interest would emerge from Japan over the coming weeks. Vietnam's 5% broken rice prices were unchanged from a week earlier at $500 per tonne, their highest since December 2011. Traders said Vietnam's total rice exports this year will be 6.0-6.2 million tonnes, lower than a previous target of 6.5 million tonnes. "Trade is very slow at the moment as domestic supplies are running low," a trader based in Ho Chi Minh City said, adding that paddy purchases from Cambodia could ease the shortage. "Demand is expected to pick up over the coming days and we expect to see a good year for rice exports in 2021, with strong demand from the Philippines." Top exporter India's 5% broken parboiled variety extended gains to $381-$387 per tonne this week, from last week's $380-$385 on good demand from Bangladesh and African countries. "Demand is good, but shipments are getting delayed due to congestion at ports," said an exporter based at Kakinada in the southern state of Andhra Pradesh. Bangladesh is finalizing a purchase of 150,000 tonnes of rice from India's NAFED, the New Delhi-based state agency told Reuters. This would be the first such bilateral deal in three years after floods in Bangladesh sent local prices to a record high.

Pakistan is already fighting its case against India’s application for an exclusive GI (Geographical Indication) tag for basmati rice after the Intellectual Property Organisation (IPO) filed an application in the European Union (EU). However, it is unfortunate knowing that Pakistan has not registered basmati as a local commodity. The reason for our failure to protect basmati rice as a Pakistani product is the flawed piece of legislation, Geographical Indications (Registration and Protection) Act, 2020. The legal document enacted in March this year has no mechanism to register basmati as a distinct local merchandise. If the authorities fail to catalog basmati rice as a unique Pakistani commodity under local GI laws, then our case before the European Commission (EC) will weaken. Unfortunately, successive governments failed to formulate the GI laws despite the Rice Exporters Association of Pakistan’s (REAP) requests since the early 2000s. The government has to keep up with the crushing timeline and make the required amendments in the GI Act before it takes up its case in the EC. The EU is one of the most lucrative markets for Pakistani rice exporters. We cannot afford losing it because of negligence. It is pertinent to mention here that Pakistan’s exports of basmati to the EU have more than doubled in the last five years. Those of India have been shrinking because of the strict EU standards on the use of pesticides. We have already made inroads; it would not be wise to let a rival completely take over the market through the use of technicalities. The commerce ministry needs to get the REAP on board while formulating the required GI rules. If we can register the GI of basmati internally, our case in the EU will strengthen. Geographic labelling of basmati rice holds immense significance for Pakistani rice growers. The state must utilise all its resources in convincing the EU that Pakistan has a right to a GI tag for basmati rice. Indian traders are lobbying for exclusivity, as the application reveals. If the GI tag goes to India, Pakistan will lose the European market automatically.

While Pakistan is fighting its case in the European Union against the Indian move to get Basmati rice registered as its product, the commodity is still not registered as a local product in the country.

Laws require that before applying for registration of any product at the international market it has to be protected under the geographical indication (GI) laws of that country. However, there are no rules of the Geographical Indications (Registration and Protection) Act, 2020, enacted in March this year; as a result, Basmati is not yet a protected product in Pakistan. A rice exporter told Dawn that the exporters, particularly the Rice Exporters Association of Pakistan, had been urging the government since early 2000 to formulate the GI laws.

India claims before EU sole ownership of commodity

“The laws were finally made in March this year, but the authorities have not yet framed the rules of GI law. As a result many local exportable products cannot be registered anywhere in the world with Pakistani GI tagging,” the exporter said. “Even now the pressure of the case at the EU is driving the authorities to finalise the rules for GI law at the earliest,” he added. The issue of protecting Basmati rice as a product of Pakistan came to the forefront after India submitted an application to the European Union claiming sole ownership of the commodity in September this year. In its application India has claimed that “Basmati” is special long grain aromatic rice grown and produced in a particular geographical region of the subcontinent. After highlighting the brief history of Basmati rice, India also claimed that the region is a part of northern India, below the foothills of the Himalayas forming part of the Indo-Gangetic plain. Incidentally, the issue was pointed out to the ministry of commerce and its attached department, the Intellectual Property Organisation (IPO) of Pakistan by the rice exporters after observing the details of fresh applications at EU website. Since the case was placed for public hearing and invitation of objections, the matter was taken up by the authorities and Adviser to the Prime Minister on Commerce Abdul Razak Dawood held a meeting in October. Eventually, the Indian claim at the EU was challenged earlier this month and the main argument by Pakistan was that basmati rice was a joint product of India and Pakistan. Pakistan exported 500,000 to 700,000 tonnes of basmati rice annually to different parts of the world out of which 200,000 to 250,000 tonnes is being shipped to EU countries. Meanwhile, responding to a query IPO Spokesman Meesak Arif said that the rules of GI law were at the final stages and were likely to be notified soon. “The rules are in the printing process and will be notified by the commerce ministry soon,” Mr Arif said, adding that the government had authorised the Trade Development Authority of Pakistan (TDAP) as the lead agency regarding Basmati rice. Soon after the rules were notified, the TDAP would file for the GI protection of basmati rice in the country, which would eventually make the case of Pakistan at the EU and elsewhere strong, he added.

In July 2020, rice export shipments shrank to 266,206 tonnes from 365,138 tonnes in July 2019. Export earnings fell to $148.8 million from $194.5m.

These numbers released recently by the Pakistan Bureau of Statistics (PBS) do not necessarily indicate that during this fiscal year rice exports would tumble. But they bring to the fore some inefficiencies of exporters and government-run agencies. In 2019-20, Pakistan’s rice exports fetched $2.27 billion with an annual growth rate of five per cent, according to the State Bank of Pakistan’s (SBP) foreign trade report. This increase came at a time when Pakistan’s total food export bill of about $4.36bn was down more than 5pc from $4.61bn in 2018-19, according to the PBS. For the past few months, exporters were warning the government of the damage to the paddy crop during the ongoing second locust attack. The government claims it is fighting the second locust attack more furiously than it did during the first quarter of this year. It claims that the ongoing second attack has only slightly hurt the paddy crop that is at the flowering and harvesting stage. But exporters say the damage to the paddy crop, particularly in Sindh, is being underestimated by authorities. They say rice millers started factoring this in back in July and raised the prices of rice varieties for commercial exporters who, in turn, failed to export as much as they did in July last year.

The nation can spare 4.4m tonnes for exports as domestic consumption and contingency reserves don’t require more than 3m tonnes. But it is up to the Ministry of Commerce and our exporters to find buyers for 4.4m tonnes of rice

Even the mills that directly export rice failed to get as large buying orders as they did in July last year: their own cost of rice processing increased owing to the general inflationary trend and due to higher forward paddy prices paid to growers who were anticipating the crop’s damage under the second locust attack. Going forward, the future of rice export earnings depends on whether exporters can manage to export 1m-1.2m tonnes of Basmati rice and 3m tonnes or more of non-Basmati varieties. In 2018-19 as well as 2019-20, total rice shipments remained above 4m tonnes. But the exports of Basmati rice stood at 791,000 tonnes and 890,000 tonnes in 2018-19 and 2019-20, respectively. Rice Exporters Association of Pakistan (Reap) Chairman Shahjahan Malik hopes that during this fiscal year Basmati rice exports would touch the 1m-tonne mark. Based on July 2020 statistics of the PBS, the average export price of Pakistani Basmati rice now hovers around $955 per tonne whereas that of non-Basmati rice is around $453 per tonne. With some effort, the average export price for Basmati and non-Basmati could be raised to $1,100-1,200 per tonne and $500-600 per tonne, respectively. If this happens — and exporters, particularly those of Basmati rice, say they are working seriously to make this happen — then rice export earnings could be enhanced substantially with a little increase in the volume of 2019-20 that was below 4.2m tonnes. According to Reap statistics, the average export price of Basmati rice had shot up to $1,153 per tonne back in 2013-14. But this level could not be sustained in later years owing to fierce competition in global markets and, in recent years, also due to a huge depreciation that reduced massive gains in exports in the local currency. The US Department of Agriculture (USDA) recently projected that Pakistan’s milled rice output during this crop year could be 7.4m tonnes against the target of about 8m tonnes set by our Federal Committee on Agriculture. The nation can easily spare 4.4m tonnes for exports as domestic consumption and contingency reserves don’t require more than 3m tonnes. But it is up to the Ministry of Commerce and our exporters to find buyers of 4.4m tonnes of rice. This should not be a problem as lockdowns in parts of India still continue, making rice exports difficult like they were in April-June. Our exporters grabbed that opportunity during the quarter to boost rice exports. But even if Pakistani exporters get some share of Indian rice exports, particularly in the Gulf region, overall competition in global markets this year is expected to remain tough — with Vietnam having a larger exportable surplus and with stricter rules in place for clearance of import consignments at ports of buying countries amidst Covid-19 safety measures. The USDA has projected a straight 17pc increase in Vietnam’s total rice output this year. Maintaining growth momentum in rice exports during this fiscal year also depends on whether brisk shipments to the United Arab Emirates and Saudi Arabia remain intact. They are among Pakistan’s important markets and our rice export earnings from these two countries were 18pc of the total, according to the SBP. Owing to the unfolding of deep and surprising strategic developments in the Gulf region, it is premature to predict how these developments will eventually impact our trade in the region. In 2019-20, our rice exports to China — the second largest market after the United Arab Emirates — did suffer because of Covid-19–triggered lockdowns earlier in China and later on in our own major cities. So the China factor would also determine to a great extent how our rice exports could grow in 2020-21. Exporters say that unlike the United Arab Emirates, Saudi Arabia, United States and the United Kingdom where Pakistan’s rice demand does not fall easily on price consideration, it does in China. This means that to boost rice exports to China, exporters will have to be more competitive than in the aforementioned countries. That is an uphill task, more so because in China there is far greater demand for our non-Basmati rice than Basmati varieties. And the damage done to paddy crops mainly due to the second locust attack and the increase in the transportation cost after a massive rise in domestic fuel prices have pushed up the cost of procurement of non-Basmati varieties for commercial and industrial exporters.

 

Geographical Indication (GI) is a sign used A on products that have a specific geographical origin and possess a reputation or quality that is due to that origin. The qualities, characteristics or reputation of the product should be essentially due to the place of origin. Since the qualities depend on the geographical place of production, there is a clear link between the product and its original place of production. In the context of Nepal, there are no specific laws regarding GI registration. However, there is the Patent, Design and Trademark Act, 1965 (PDTA) to protect industrial property, and it also protects collective trademarks, which can be used for GI protection.

After a continuous downward slide for the first four months of the current financial year against the corresponding period, rice exports from Pakistan witnessed a healthy trend in November 2020 and showed a slight growth at 458,104 tons against 452,020 tons in November 2019. “But the most important aspect of November 2020 rice exports is 28% increase in Basmati export from 61,054 tons in November 2019 to 78,160 tons in November 2020 mainly due to the enhanced volume of Basmati Brown export to the EU. It is estimated that during Nov 2020, Pakistan exported approximately 25,000 to 30,000 tons of Basmati Brown rice,” said Rice Exporters Association of Pakistan (REAP) Senior Vice Chairman Faisal Jahangir Malik while talking to Business Recorder here on Saturday. He termed the increase in Basmati rice exports as the entry of European buyers in the market especially from the UK, Italy, and Spain. Meanwhile, Hamid Malik, a rice sector analyst and consultant while sharing the export figures said non-Basmati exports in November 2020 decreased from 390,956 tons in November 2019 to 379,944 tons in 2020 mainly due to less priced Indian non-Basmati white and Parboiled rice. India is having a huge carryover rice stock and a bumper production from just harvested crop. India is cheaper by $30-40/ton for 5% broken than Pakistan’s $70-80/ton. The overall Pakistan rice exports in five months from July to Nov 2020 came down to 1,340,770 tons as compared to 1,628,295 (July-Nov 19), a massive decrease of 17% in five months of this fiscal year, he said, and expressed his fear that Pakistan Rice export in the fiscal year 2020-21 will not cross 4 million tons.

Rice Exporters Association of Pakistan (REAP) is preparing to initiate second step against the India’s claim on Geographical Indicator (GI) of Basmati and will file a reasoned statement, within 60 days as required. REAP is fighting the battle against India’s claim on geographical indicator of Basmati in EU. After the announcement of application of India for GI in European Journal, the first step was to stop India from proceeding further in its registration of GI in European Commission by filing a notice of opposition. Accordingly, REAP filed Notice of Opposition in EU by challenging. According to REAP, this is the first step which effectively maintains the status quo, whereby making the applicant’s (India) approval of GI conditional on the decision of DG Agriculture European Commission. Current status of the case is that REAP has filed a Notice of Opposition on 07-12-2020 against India’s claim on GI of Basmati in the European Union and the European Union has also acknowledged the filings of the ‘Notice of Opposition’ by REAP. Sources said that REAP is at this second step and preparing a reasoned statement to file, within 60 days as required. At the third step, hearings and other proceedings will start after this period of 60 days elapses, which will be in February 2021. The final decision on the registration of GI of Basmati will be delivered after the hearings. As the case in EU progress, REAP will keep on updating on all the developments. Basmati, being a centuries-old heritage of Pakistan, could not be allowed to be monopolised by India in the European market. Such a gross misrepresentation by India on the origins of Basmati is an attack on the values of fair competition among farmers and exporters in EU. Pakistan has a legal right to export Basmati with its original name in accordance with the practice in EU which is decades old. REAP is confident that Pakistan has a strong case as the EU recognises Pakistan as an authentic Basmati growing region. The GI tag is an exclusive right to sell products in the registered market.

In Iran, the biggest buyer of Indian basmati, payments were held up as the country’s central bank delayed allocation of the currency to traders to buy rice and other commodities.

  India's basmati rice exports continue to grow, especially to Iran, despite shippers facing payment problems from the largest buyer of the fragrant grain. “Basmati exports are doing very well. They are 30 percent higher this year compared with last year,” former president of Delhi-based All India Rice Exporters Association (AIREA) Vijay Setia said. According to the Agricultural and Processed Food Products Export Development Authority (APEDA), an arm of the commerce ministry, basmati exports in the first half of the current fiscal were up 33 percent at 27.44 lakh tonnes compared with 20.57 lakh tonnes during the year-ago period. Though the per-unit value realisation was low at $885 a tonne against $1,061 last year, the shipments have increased 17 percent in rupee value. In dollar terms, basmati shipments earned $2.4 billion in the first half of the fiscal. The rise in shipments comes on the heels of Pakistan making a bid to make inroads in the Iranian market after India and other countries complained of payment delays. “People are getting the payments for basmati exports from Iran but they are delayed. Shippers raised a hue and cry when they were delayed. The concern over late payments remains,” said Setia, also the executive director of Chaman Lal Setia Exports that sells basmati under Maharani brand. According to a multinational company’s export official, basmati exporters were taking a risk by selling to Iran but they had changed their strategy. “Exporters are stocking up the rice and selling there. They have set up distribution points. This is helping them continue exports,” the official said. It also indicates that Pakistan's attempts were not paying off. Though India, which accounts for 70 percent of the world’s basmati production, exports to more than 200 countries, Iran alone accounts for 34 percent of the shipment. In 2019-20, Iran was the biggest importer of basmati, buying 13.19 lakh tonnes valued at $1.23 billion compared with 14.83 lakh tonnes worth $1.55 billion the previous year. In 2019-20, 44.54 lakh tonnes of basmati was imported against 44.14 lakh tonnes the previous year. The earnings were, however, lower at $4.33 billion versus $4.72 billion. In October this year, veteran Pakistani journalist Muhammad Ziauddin tweeted that Iran was in the process of shifting its basmati rice import from India to Pakistan. The 33 percent rise in basmati export comes after AIREA reported a drop in shipments during the April-July period. The drop was reported at a time when prices were on the downswing due to projections of higher production this year. Basmati production was estimated to increase 10 percent this year to 6.13 million tonnes, mainly on a five percent increase in the area under cultivation. In Iran, payments were being held up as the country’s central bank delayed allocation of the currency to Iranian traders to buy basmati and other commodities. This initially prevented Indian exporters from entering into new contracts. AIREA said in June that 2.5 lakh tonnes of basmati valued at Rs 1,700 crore had got stuck at Iranian ports. Payments from previous shipments were also pending, it said. This seems to be in the past now. The problem was on account of the slide in the value of the Iranian rial against the US dollar. It dropped to one of its lowest in June, hit by the US sanctions that have derailed crude exports. The country’s revenue from oil has plunged to $8 billion from $100 billion in 2011. The rial is now trading at 250,000 to the dollar, recovering from 300,000 in early October. With Joe Biden taking over as the president in January, Iran is hoping that the situation will improve, though it remains firm on its missile program, which had invited sanctions.

The government has floated a tender to buy 50,000 tonnes of parboiled rice from international markets to increase stocks and rein in the soaring prices of the staple in domestic markets, according to a notification from the Directorate of Food. This was the third tender floated by the food office in the last one month. The government previously approved two previous tenders to buy 100,000 tonnes of rice from two Indian suppliers. The move comes at a time when the price of rice is soaring due to a shortage in public warehouses that stems from sluggish procurement during the current Aman harvesting season. Since the beginning of the procurement period for paddy and rice this year, the Directorate of Food could procure just 115 tonnes of paddy and 5,900 tonnes of rice from farmers and millers as of December 10. The amount of paddy and rice purchased was no more than 1 per cent of the targets for this year. This resulted in the gain shortage at state go-downs. As of December 10, rice and wheat stocks stood at 7.7 lakh tonnes, down 44 per cent year-on-year from 13.85 lakh tonnes. Sarwar Mahmud, director-general of the Directorate of Food, said his office plans to buy more rice. "We are also going to float a tender to buy 100,000 tonnes of wheat from the international market," he added. The government imported 2.15 lakh tonnes of wheat between July 1 and December 10 this fiscal year. The amount purchased was 59 per cent of the government's total rice import in fiscal 2019-20 when it was 3.67 lakh tonnes.

BENGALURU: Rice export prices in India rose for a third straight week to its highest in more than two months due to an appreciation in the rupee and healthy demand from buyers in Asia and Africa. Prices for the top exporter's 5% broken parboiled variety rose to $378-$383 per tonne, their highest since the week of Sept. 24, from $375-$381 last week. The appreciating rupee reduces traders' margin from overseas sales and higher freight charges have been forcing exporters to hike prices, said an exporter based at Kakinada in the southern state of Andhra Pradesh. "Demand is good. Buyers like China are switching to India due to lower prices," the exporter said. China will import 100,000 tonnes of broken rice from India due to dwindling supplies from Thailand, Myanmar and Vietnam. Bangladesh will buy another 50,000 tonnes at $404.35 per tonne from India through a tender in an effort to shore up domestic reserves. Vietnam's 5% broken rice prices were unchanged at $470-$490 per tonne. "Trading activity has been slow over the past week on weak demand," said a trader based in Ho Chi Minh City. "We expect exports will rise during the first quarter of next year on rising demand from the Philippines, Africa and China," the trader noted. Another trader said Vietnam and China are setting up a hotline to facilitate bilateral trade of agricultural products, including rice, following recent disruptions due to the coronavirus outbreak.

The government yesterday gave its nod to a proposal to buy 50,000 tonnes of parboiled rice from abroad as part of its effort to augment public food stock. The initiative also aims at helping the government intervene in the market through social safety net schemes to curb volatility in the price of the staple. Indian company Rika Global Impex Ltd got the contract to supply the food grain at $404 per tonne, said Abu Saleh Mostafa Kamal, additional secretary of the cabinet division, after a meeting of the cabinet committee on purchase. In the local currency, the price will be Tk 34.28 each kilogram. Law Minister Anisul Huq chaired the meeting. The Indian supplier was the lowest bidder. The highest bid was $423.95 per tonne, said an official of the food ministry. This was the second tender from the government in the last one month as it was not getting enough responses from farmers and millers to supply paddy and rice respectively at its fixed prices because of soaring prices in the local market. Last month, the Directorate of Food invited bids to buy the grains from external sources. The food office also could not attain the target on the procurement of rice and paddy from the Boro harvest. But instead of hiking its rice and paddy purchase prices from local markets during the current harvest of Aman crop, the food ministry is turning to international markets to buy the grain. In the first phase, it plans to buy 300,000 tonnes of rice out of a target of up to 5 lakh tonnes to replenish the public food stock, said Food Secretary Mosammat Nazmanara Khanum earlier this week. As of December 7, the stock of foodgrains in the state-run warehouses was 7.9 lakh tonnes, down 43 percent from 13.87 lakh tonnes on the same day a year ago, food ministry data showed. Until the date, the Directorate of Food has managed to buy only 53 tonnes of paddy out of its target of 200,000 tonnes from local growers. When it comes to rice, it has been able to procure 3,476 tonnes from millers out of 600,000 tonnes targeted. 

    ISLAMABAD   -   About 838,770 metric tonnes of rice valuing $499.485 million exported during first four months of the current financial year as compared the exports of 1,176,228 metric tonnes worth $ 633.797 million of the corresponding period of last year. According to the data of Pakistan Bureau of Statistics, rice exports from the country during the period from July-October, 2020-21 decreased by 21.19 per cent as compared to the exports of the same period of last year. During the period under review about 170,729 metric tonnes of  Basmati rice worth $168.745 million exported as against the exports of 283,458 metric tonnes valuing  259.099 million of the same period of last year. The exports of basmati rice during the period under review reduced by 34.87per cent as compared the exports of the same period of last year, the data revelled. However, during last four months, exports of vegetable grew by 20.16per cent as about 156,286 metric tonnes of vegetables worth $66.554 million exported, which was recorded at 197,596 metric tonnes valuing $55.386 million of the same period of last year. During the period from July-September, 2020-21, exports of meat and meat preparation registered a growth of 5.83 per cent as 30,403 metric tonnes of meat and meat products worth of $102.968 million exported as compared the exports of 25,442 metric tonnes valuing $ 97.300 million of the same period of last year, it added. It is worth mentioning here that in last four months of current financial year food group imports into the country grew by 43.49 per cent as different food commodities costing $ 2.272 billion imported as against the imports of 1.583 billion of the same period of last year. On the other hand, food group exports from the country during the period review went down by 16.77 per cent as it was recorded at $ 1.331 billion from July-October, 2020 as compared to $ 1.359 billion of the corresponding period of last year.

  Basmati rice. It is the rice fit for kings. But today, these grains of rice are at the center of a fresh fight between bitter rivals India and Pakistan. The reason? India applied for an exclusive Geographical Indications tag to Indian-origin basmati rice with the EU’s Council on Quality Schemes for Agricultural and Foodstuffs. The application was published in an official EU journal on September 11, 2020, after clearing internal evaluations. In India, basmati cultivation is dictated by geography. There is a ‘Basmati growing region’, one which includes the states and Union territories of Jammu and Kashmir, Himachal Pradesh, Punjab, Haryana, Chandigarh, Delhi, Uttarakhand and Uttar Pradesh. The cold weather of this region is suitable for Basmati cultivation. So, what does Pakistan have to do with all this? Well, apparently, Pakistan too has a Basmati belt, the Kalar bowl, a tract of land in the interfluve between the Ravi and the Chenab rivers, comprising the Narowal, Sialkot, Gujranwala, Hafizabad and Sheikhupura districts in Punjab province. Turns out that India has a 65 percent share in the global Basmati market while Pakistan has the rest. In fact, Pakistan’s exports to the EU have almost doubled over three years since permissible levels of pesticides on imported agricultural products to the bloc were reduced in 2018, while India has repeatedly failed the tests. Basmati is an export-oriented item for both India and Pakistan In 2019-20, India produced 7.5 million tonnes of basmati, of which 61 percent was exported, earning the country Rs 31,025 crore according to the Union Ministry of Commerce and Industry. According to the Pakistan Bureau of Statistics, the country exported 0.89 million tonnes of basmati in 2019-20. If India gets the GI tag, Pakistan would be effectively kept out of the European market for basmati rice even though it is a major producer.   History of Basmati

Basmati is most likely of medieval origin. The history and folklore of basmati rice is an academic paper published last year in the Journal of Cereal Research. It was written by Subhash Chander, Uma and Siddharth Ahuja.

Subhash Chander Ahuja is a retired plant pathologist from the Rice Research Station, Chaudhary Charan Singh Haryana Agricultural University in Kaul, Haryana. Uma Ahuja is a retired professor of Genetics and Plant Breeding, College of Agriculture, Chaudhary Charan Singh Haryana Agricultural University in Kaul, Haryana. Siddharth Ahuja is from the Department of Pharmocology, Shaheed Hasan Khan Mewati Government Medical College, Nalhar, Mewat, Haryana. In section 3.1 titled Historical growing areas, their paper reads:

The Ain-i-Akbari records cultivation of Mushkeen in the subahs of Lahore, Multan, Allahabad, Oudh, Delhi, Agra, Ajmer and the Raisen area of Malwa Subah

Mushkeen, also called Lal Basmati, is the red-husked variant of Basmati. Though not as popular as the light, golden-husked variant today, the paper says, it was popular in the kitchens of the Mughal Emperors. Significantly though, the paper reminds us that Basmati did grow in the Lahore and Multan provinces of the Mughal Empire, which are today in present-day Pakistan. Pakistan’s claim over Basmati is strengthened by the fact that the first mention of the word ‘Basmati’ is in the popular tragic romance, Heer-Ranjha, written in 1766 or 1767 by the Punjabi Sufi, Waris Shah. The academic paper Range and Limit of Geographical Indication Scheme: The case of Basmati Rice from Punjab Pakistan is by French professor Georges Giraud. It was published in 2008 in the International Food and Agribusiness Management Review, Volume 11, Issue 1. It mentions that the romance was translated into English in 1910 by Charles Frederick Usborne, a British Indian Civil Servant and a scholar of Punjabi. The second paragraph of Chapter 16 of Usborne’s The Adventures of Heer and Ranjha describes several foods displayed for a wedding. It says and I quote:

…All kinds of varieties of rice, even Mushki and Basmutti and Musagir and Begami and Sonputti

It is worth noting that Heer-Ranjha is set in the town of Jhang on the east bank of the Chenab in Pakistan’s Punjab. Ironically, this paragraph was cited by the Indian government while contesting Texas-based firm, RiceTec’s attempt in the late 1990s to appropriate Basmati rice. Even more ironically, India at the time was actively supported by the Pakistani government. Both eventually succeeded in thwarting RiceTec’s scheme. But even as the subcontinental twins squabble over Basmati, Indian farmers are increasingly finding it hard to grow it.

The reasons are many. In just seven years, the price of Basmati has halved. Why? Because, India’s exports have been hit due to the pesticides controversy as well as US sanctions on Iran, a major importer.

Exporters have not paid to rice mill owners, who in turn have reduced purchase of basmati from local cultivators.  This, then, is the current status of our Basmati farmers. Dayanand, a farmer of Basmati from Ghummanhera village on the outskirts of Delhi, told Down To Earth that getting a GI tag from the European Union would not improve his or his peers’ lot. Returning to the question of the GI tag, India and Pakistan have a bitter relationship. But the Republic of India was founded on the principle of fairness. Morality, fairness and ethics dictate that India is on a sticky wicket as far as claiming Basmati as entirely its own is concerned. Our move may destroy Pakistan’s basmati farmers. But will it improve the lot of our farmers?  But in these times of hyper-nationalism, populism and nativism, all such talk is anathema, sacrilege, and blasphemy. And lest anybody’s sentiments are hurt after seeing this, I tender my apology. As things stand, my task is to inform. Until the final decision comes out on December 10, on who actually owns it, just sit back…and enjoy your basmati…Bon Appetit.

Rajamudi is a traditional red rice variety of Old Mysore region

 

Basmati rice is considered inherently superior due to its aroma and long grain characteristics. Native only to the sub-continent for hundreds of years, the term “basmati” itself has become a brand name of sorts amongst rice varieties, thus commanding a premium price. India and Pakistan are the only two countries growing basmati rice. Though Pakistan’s rice is accepted as basmati globally, it is not registered legally internationally. That would require involvement of several institutions including the Ministry of Commerce and the Law Ministry, before being taken to the parliament. The cumbersome process has had little push since basmati sales were not affected; allow the law to languish for nearly two decades. However, sources in the rice sector indicate that Geographical Indication (GI) law will be enacted for basmati rice this year. To understand why this is important for Pakistan’s basmati exports, India’s history of GI law needs to be taken into context. In December 1999, the Indian parliament passed Geographical Indications of Goods (Registration and Protection) Act. This act is used to identify agricultural, natural, or manufactured goods that have a special quality or reputation specific to a definite geographical territory. GI tagging is an intellectual  property right (IPR) which confers legal protection and prevents unauthorized use by others. Internationally, the WTO Agreement on Trade-Related Intellectual Property Rights (TRIPS) is dedicated to geographical indications. In 2010, GI status was granted to basmati rice grown in seven states including Punjab, Harayana, and part of Uttar Pradesh among others while Madhya Pradesh was excluded from the list. Indian media sources indicate that apex bodies Agricultural & Processed Food Products Export Development Authority (APEDA) and the Indian Council of Agricultural Research (ICAR) blocked MP’s inclusion due the state neither having a history nor the specific agro-climatic for growing basmati. Madhya Pradesh has been fighting to be conferred GI status for basmati rice ever since then. Its case was rejected by the GI registry last year so MP has challenged the order in the Madras High Court. It appears that the primary contention against MP’s inclusion is that basmati rice will lose its premium tag that could lead to a decline in its prices. Since MP’s basmati rice is not accepted so by Indian authorities, the rice finds it hard to command the price its counterparts do in domestic and international markets. While states fight amongst themselves, Pakistan’s lack of protection by GI law has not been taken to task by India. Consider this scenario: India tomorrow files a case under WTO claiming that they alone export basmati rice. Pakistan does not have GI tagging to back its claim and thus the price per unit charged by exporters would be adversely affected. In terms of value and quantity, the most popular variety of basmati earns more than thrice the most popular variety of non-basmati rice. REAP data indicates that Super Basmati was on average $1,168 per ton whereas IRRI-6 Rice was $352 per ton in FY15. Since basmati rice is not protected legally, if India was to file a case against Pakistan, the country could lose this advantage of premium pricing. Markets like EU would no longer be willing to pay a higher rate for rice not accepted as basmati. While promoting Pakistan’s basmati rice under GI law is not pressing at the moment, it is best to not be caught sleeping. In India, some specific states tried for and were accepted as basmati cultivating belts. The case is different in Pakistan where the GI law under consideration will be applicable to the country wherever requirements are met. This is especially growing in importance since movements in EU, one of the biggest basmati rice consuming markets, indicate that Pakistan’s opportunity to export will increase. When EU decreased the fungicide Tricylazole levels acceptable limit, India’s exports were badly hit. Sources indicate that EU’s acceptable Aflatoxin levels are to be revised which may hamper India’s basmati exports further.  

The coveted GI tag is a name or sign that corresponds to specific geographical locations. Usage of such a certification on a product would indicate that it possesses certain qualities exclusive to its land of origin.

May 19, 2017- Nepal’s cereal imports swelled by double digits despite a record food grain harvest this fiscal year, as consumers asserted their preference for aromatic basmati rice from India over the local product. Long grain basmati rice holds a unique charm in global markets including Nepal, and this has resulted in a growth in rice imports although the country produced surplus grain, agro experts said According to the Trade and Export Promotion Centre, Nepal imported cereals worth Rs29.41 billion in the first nine months of the current fiscal year, up 11.9 percent from the same period last year. In the previous fiscal year 2015-16, cereal imports totalled Rs39.34 billion.  Meanwhile, Nepal Rastra Bank’s statistics show that of the total cereal imports, the rice import bill came to Rs18.52 billion in the first nine months of the current fiscal year. The figure represents a 15.9 percent rise year-on-year.  Paddy production jumped to an all-time high of 21.66 percent to 5.23 million tonnes this fiscal year, after two consecutive years of falling harvests triggered by drought. The country produced an additional 931,248 tonnes of paddy this year. In the last fiscal year, a crippling drought hit paddy production severely, dragging it down by 10.22 percent to 4.29 million tonnes. Based on the average price of Rs21.45 per kg set by the ministry, this year’s output is valued at Rs113 billion, excluding the value of straw and husk.  Although officials of the Ministry of Agricultural Development had estimated that the record harvest would bring down the country’s rice import bill, this did not happen.  “It’s not surprising. The record paddy output this year has not dented the import bill because the expanding population of middle income Nepalis prefer to eat basmati rice,” said Bhola Man Singh Basnet, an agro expert and scientist. “We don’t have sufficient production of fine rice like basmati, so demand is met by imports.” India is the sole exporter of basmati rice to Nepal. According to Basnet, there seems to be a direct link between remittance and food habits in Nepal. “Nepalis have been earning more from the last couple of years, and demand for basmati rice has grown accordingly.”   He said that Indian basmati rice was much cheaper compared to Nepal’s product due to the low cost of production and India’s heavily subsidized farm sector.   The per capita rice consumption in many Asian countries has decreased as a new wealthy middle class replaced simple rice meals with meat-laden and Western style food, experts said.  As per the Ministry of Agricultural Development, a Nepali consumes an average of 191 kg of food every year—90 kg of rice, 45 kg of maize, 45 kg of wheat and other foods like meat and dairy products.   “Food habits in Nepal have not changed much. Eating white rice twice daily makes you weak,” said Yogendra Kumar Karki, spokesperson for the ministry.  The contribution of rice to the energy intake in Nepal needs to be decreased and replaced by wheat, beans and other crops. “We have been launching various programmes and projects to educate people and encourage them to change their food habits.”  He added that the government would be establishing a corn flake mill in the Eastern Region to promote cereals made by toasting flakes of corn and wean people away from traditional beaten rice. Published: 19-05-2017 08:33 http://kathmandupost.ekantipur.com/news/2017-05-19/basmati-lovers-drive-up-rice-import-bill.html