• Pakistan exported rice worth $3.9 billion last year that traders fear could drop by $1 billion due to India’s lifting of ban on exports
• In a tit-for-tat move, Pakistani commerce ministry has withdrawn minimum export price to keep traders competitive in global market

ISLAMABAD: Pakistani rice traders said on Thursday that exports of the commodity could face a setback this year as neighboring India, one of the major competitors in the global market, had lifted restrictions on rice exports.

Pakistan exported rice worth $3.9 billion this year as compared to $2.15 billion last year, benefitting from India’s more-than-a-year-long ban on rice exports to fulfil its domestic needs. Last week, the Indian government lifted the ban and removed minimum export price of the commodity following a bumper crop yield this year.

In a tit-for-tat move, Pakistan has also withdrawn the minimum export price for all rice varieties to compete with Indian exporters in the global market. Pakistan’s minimum export price for the rice ranged from $450 per metric ton to $900 per metric ton for super basmati and white sella rice, according to a government notification available with Arab News.

The South Asian arch-rivals are the only countries that produce basmati rice which is famous for its unique flavour and aroma around the globe. India has been the largest exporter of rice worldwide, followed by Pakistan, Thailand and Vietnam.

“Now the basmati rice with a label of either from India or Pakistan will be available in the global market this year, so Pakistan’s exports are expected to decline by at least $1 billion from the previous year,” said Malik Faisal Jahangir, chairman of the Rice Exporters Association of Pakistan (REAP).

He said Pakistan was exporting basmati rice to Europe and the Middle Eastern countries on an average $1,250 per metric ton as the Indian commodity was not available in the market due to the ban.

“India is direct competitor of Pakistan in rice exports, therefore our exports could decline in the international market after India lifted restrictions on the commodity,” he told Arab News. “Pakistan has withdrawn the minimum export price in reaction to India’s decision and we hope this will help create a level playing field to boost our exports.”

Pakistan’s commerce ministry said the minimum export price was introduced last year in response to rising global prices and a ban imposed by India on rice exports.

“The minimum export price has now become an obstacle for Pakistani rice exporters to remain competitive in global markets after India lifted its export ban and following a decline in international rice prices,” the ministry said in a statement.

Pakistani authorities have set a target of $5 billion rice exports for this fiscal year, while the exporters feared the government’s “regressive export policies and additional taxes” would bring down rice exports to $3 billion.

Irfan Noor, a rice exporter, said the government has increased tax from 1 percent to 29 percent on sales and profits of the exporters through a hybrid tax regime that would “definitely impact the exports negatively.”

He said Pakistan’s $3.9 billion rice exports were “an exception” due to India’s export ban on the commodity.

“Our rice exports will decrease this year due to India’s entry in the market that is also offering incentives to its traders on exports,” Noor said.

He urged the Pakistani government to review its tax policies and support rice farmers in growing new seed varieties resistant to adverse impacts of climate change to boost the per acre yield.

“We can compete with India in the global market only if our policy-makers come up with a holistic approach both for farmers and the exporters,” he added.

Published Date: October 4, 2024