KARACHI: After achieving an all-time high export of $4 billion, rice exporters are now setting their sights on a $6 billion rice export for the current fiscal year (FY25), buoyed by a bumper crop.

Chela Ram Kewlani, Chairman, Rice Exporters Association of Pakistan (REAP), told Business Recorder that Pakistani exporters have earned an all-time high $3.93 billion foreign exchange by exporting some 6 million tons of rice during the last fiscal year (FY24). This milestone was achieved mainly due to the ban on rice exports by India due to short crop. India is Pakistan’s competitor in the world market.

“Further growth in rice exports depends on the government’s support. The federal government must address three major issues including tax system, rising power tariff and higher interest rate to continue this growth momentum in exports and achieve $6 billion mark rice exports in this fiscal year, otherwise the rice exports may face some declining trend in coming months, “ he warned.

He appreciated the Trade Development Authority of Pakistan’s (TDAP) efforts for organizing the FoodAg 2024 exhibition from August 9 to 11 at Karachi Export center. He informed that a large number of rice exporters are participating in the fair to grape the foreign orders.

Over 330 Pakistani exhibitors representing leading exporters of agriculture and food industry are participating in the FoodAg 2024, while 932 buyers have arrived from 80 countries to attend this expo.

On the sideline of the FoodAg, REAP has decided to celebrate the $4 billion mark rice exports and a grand function has been arranged on August 9, 2024 for Pakistani exporters to encourage them. Over 400 foreign delegates will also attend this mega function to celebrate the $4 billion rice exports, he added.

India is the major competitor of Pakistan in the world rice market, however unfortunately its imposed ban on the exports to meet the domestic demand. Pakistani traders have taken full advantage of this opportunity and exported all time higher quantity rice during the last fiscal year.

After achieving all time high rice exports, now exporters are moving toward $6 billion rice exports in this fiscal year, if the government provided a level playing field to the exporters, Kewlani said.

“If the federal government does not address the major issues like taxation and high cost of doing business, exporters will not be able to continue this growth in the future,” he warned.

As per initial estimates Pakistan has a bumper rice crop during this season and this will help bring the new rice exports to a new peak level at the end of FY25, he added.

However, this all depends on the government’s support. “There is a need to reconsider the tax changes announced in the recent budget. Shift from Final Tax Regime (FTR1 percent) to Hybrid Tax Regime will directly hit the country’s exports therefore the government must revisit this amendment and ease the tax payment system. This move will be detrimental for exports and discourage us from exporting commodities anymore,” he added.

Chairman REAP said with such enhanced tax and Super Tax Regime, the tax on commodity income will reach over 50 percent and it will also open new avenues of corruption and harassment.

He said higher electricity tariffs are directly hurting the export sector. The federal government must fix the electricity tariff at least for one year, so exporters can quote a price to its international buyer without any doubt, he demanded.

Pakistani exporters have explored many new markets like Indonesia, Russia and Vietnam and to grab these markets, the government must resolve the issues being faced by the exporters, Chairman REAP said.

He said exporters are ready to support the government in terms of tax revenue, but there is the need to ease the tax-paying system so businessmen can pay their taxes without any fear.

Copyright Business Recorder, 2024

Published Date: August 9, 2024