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Factors affecting export of rice in Pakistan

Updated on August 12, 2014

Not only the forth largest producer in the world, Pakistan is also amongst the top most rice-exporting countries.Importers of Banaspati rice include, Saudi Arabia, UAE and Qatar, Similarly, Kenya, Madagascar, Mozambique, Malaysia and China import the long grain rice (Dawn, Dec 2013).

The daily Dawn in an article published in 2013 point out a sharp yearly decrease in the rice exports. During the entire fiscal year, according to the article, FY2012-13, rice exports earned $1.84 billion. The exports earned $2.08 billion in the previous fiscal year FY2011-12. It was a drop of 11 percent.

Affecting exports:

Pakistani rice exports have faced losses in the world for four years (Dawn, 2013). There are three major factors responsible:

  1. Low Quality
  2. High Price
  3. Hoarding
  4. Production Area

Pakistan is losing its most-liked banaspati rice market, especially the Middle-East (Dawn, 2013). Other countries which are quickly mobbing away from our Banaspati include Iran and United Kingdom (UK).

Quality

Interests and priorities of different sectors of rice industry are different. These proiorities cause low exports. Farmers are interested in early maturity and high yield that would give them high returns in the form of good produce and provide enough time for sowing. The quality of rice, due to that, is compromised on, and low quality is not preferred in the international market.

Competition

Competition from Vietnam, India and Bangladesh have also played role in decreasing export volume of rice in Pakistan. Vietnamese rice is better both in quality and in price. China had been a point of hope for the country; however, its importers are quickly shifting their focus to Vietnamese rice.

Price

One of the major factors that have caused negative effects is the price of rice. The biggest reason behind high price of Pakistani rice is hoarding (Dawn, 2013) and high production & operation costs. The international environment is extremely competitive in terms of price. The Chinese market is quickly turning to Vietnam is because of the low price. The increased production and operation costs are due to high rates of electricity and gas along with cost of generators & diesel.

Hoarding

The Hoarders, black-marketers and profiteers have dominated the export of rice. To put salt to injury, influential personalities in the government are supporting those people.

Production Area

Another factor responsible for decreasing exports is decrease in production area the dominant type of rice that was produced in Punjab has been Banaspati. In the past 81.31 percent cultivated rice was Banaspati the share of which has reduced to 60.05 percent only.

The reduced cultivation area has increased the local price of rice forcing the exporter to sell the product at higher rates.

Conclusion

Pakistan is gradually, consistently and continuously decreasing the export of its rice for five years. The international environment is no longer in its favor and is now highly competitive. New players are quickly emerging with higher quality and lower price. Pakistan need to revise its policies and make quick move until it is too late.

Recommendations

I would first recommend that:

  • Pakistan must focus its attention to explore new markets. Pakistan may target central Asian countries, such as Azerbaijan, South American countries, for example Brazil – Where only 50 Metric Tonne (MT) of Super Banaspati rice was exported in the year 2012-13 (See Appendix A) and Argentina total and African countries for its Banaspati rice, where only the Banaspati type is being exported. The total exports to Argentina were 48.08 MT in the Fiscal year FY2012-13.
  • Government should and must interfere to solve farmer’s problems.
  • Machinery, such as tractor, should be provided to farmers.
  • Farmers need training to increase the per acre production of rice and protect their crop against pest especially the most problematic Khapra beetle.
  • Researh is a field which requires immediate attention. Efforts to increase area under cultivation and to improve the quality of rice are mandatory.
  • Serious efforts are needed to reduce the support of political personalities and to discourage hoardings.

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