Pakistan Rice exports may fall short of target

Pakistan may not meet its rice export target set for the current fiscal
year 2009-10 if TCP continuous its intervention in commodity exports,
Rafique Suleman, Vice Chairman, Rice Exporters Association of Pakistan
(REAP) told Daily Times.

Rafique said that if REAP withholds its continued opposition to the
government buying of rice via Passco and TCP Tenders, as owed to these
tenders, Pakistan rice would no more be able to compete with other
origins, and there would be an increasing fear to lose major tenders in
big markets like Dubai, Iran and Saudi Arabia. Earlier, the Trading
Corporation of Pakistan (TCP) had floated a tender for the purchase of
25,000 tonnes of rice from international market, which REAP had strongly
opposed.

Intervention of TCP has put a negative impact on the commodity exports
on the account of the obvious price differences. The recent tender by
international buyers are expected to be lost by Pakistan, he pointed
out. He said that the prices of basmati and non-basmati rice are quoted
at $1100-$1200 per metric tonne in international market by exporters;
however TCP is likely to open its tender at $600-$700 per metric tonne
which would substantially hurt exports.

The situation would create further hardships for the government, which
is already under stress in financial matters due to current global
recession. Exporters are reluctant to supply rice to the TCP tender
since the purchase of rice would lead to exporters losing their
international market captured through 20 years of efforts by the private
sector, said Rafique. Expressing his concern he said that TCP could sell
this 25,000 tonnes of rice to utility stores and in the domestic market
as this quantity would be easily accepted by local market. Finally, he
urged the government to give due consideration to the matter and said
that "we must evolve and formulate a joint strategy on a $10 billion
rice industry."

Moreover, the ongoing power crisis has further pushed down exports. "The
decline in our rice export will mainly occur due to power shortages", an
exporter said. He added that besides TCP intervention the never ending
power crisis has also played its role in affecting milling. "Mills have
not been working at their maximum capacity amid electricity shortages.
The power outages have also badly effected husking and packing of the
crop," he added.

Although exports might face a decline, no domestic shortage of rice was
observed and the country had sufficient carryover stocks before the new
crop arrives in next month, he said, adding that Pakistan's total
production this year would be 6.5 million tonnes. Rice accounts for
about 8 percent of Pakistani exports and 12 percent of gross domestic
product.