By Mushtaq Ghumman

ISLAMABAD: The Ministry of Commerce has reportedly sought Rs 20 billion budget support already extended to the rice exporters to make them compatible with India in the international market, sources told Business Recorder.

The Export Development Board (EDF), headed by the Commerce Minister, approved the financial assistance for the rice sector.

“This was some kind of bridge financing of Rs 20 billion extended to the rice exporters from the EDF, which will be refunded to the Fund from formal allocation from the budget,” the sources added.

Commerce Ministry has claimed the spent amount as non-Employees Related Expenditure (ERE) from the federal budget.

The Commerce Ministry, in consultation with the State Bank of Pakistan (SBP), Pakistan Single Window (PSW), and Customs, had framed a stringent mechanism to prevent misuse of the Rs 20 billion financial assistance approved for rice exporters for a three-month period.

Rice is Pakistan’s second-largest export after textiles and a critical source of foreign exchange, rural employment, and agri-industrial activity.

Rice exports rose from USD 2.04 billion in FY2021 to USD 3.93 billion in FY2024 due to temporary global supply disruptions, but eased to USD 3.35 billion in FY2025 as major suppliers re-entered the market.

The decline intensified in the current financial year, with exports during July–December falling by approximately USD 854 million year-on-year. Of this, non-basmati rice accounted for USD 716 million, while basmati exports declined by USD 138 million, reflecting a broad-based loss of competitiveness across both premium and volume segments.

Global oversupply, led by India’s return to the export market with heavy subsidies, has depressed prices and widened the price gap. Indian basmati is priced at around USD 850–900 per metric ton, compared to USD 1,150–1,275 per metric ton for Pakistani basmati.

At the same time, elevated domestic paddy prices, high financing costs, stock accumulation in importing countries, and regional trade frictions have further constrained exports, creating liquidity stress across the value chain.

A representative of REAP, Malik Faisal Janahgir stated recently to a parliamentary forum that production is not the constraint, as Pakistan has an exportable surplus of about 4.1 million metric tons, translating into near-term export potential of around USD 2 billion if short-term competitiveness issues are addressed.

Copyright Business Recorder, 2026

Published Date: June 7, 2026