Pakistani rice export growing

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Rice

Ismat Sabir

According to a report,rice export earns $2 billion per year foreign exchange and has been the second largest export item.
The commerce ministry has prepared a proposal to include rice in the list of sectors under special incentives to promoteexport.The country is net exporter of rice and produces 60 percent more than domestic demand.
Currently, five sectors enjoy government incentives to promote exports. These exportoriented sectors are exempted from sales tax, electricity load shedding, and gas load shedding for period between December to February, in addition to enjoying reduced electricity tariffs.
Rice Exporter Association Pakistan(REAP) Chairman Safdar Hussain Mehkri said that successive governments have repeatedly asked rice producers to increase exports but were not offer incentives.
He said that rice exporters face tough competition from India and after recent devaluation of Indian rupee, the situation has worsened. He also said that rice crop yield in India is higher than in Pakistan due to cheap farm inputs.
In the current year, Pakistan exported total 2.59million metric ton of rice amounting to $1.224 billion.Rice exports from Pakistan have seen growth of 27 percent at the end of February, 2017, said Rafique Suleman, Senior Vice Chairman Rice Exporters Association of Pakistan (REAP).
He cited the figures of rice exports during July to February 2017-18, as compared to 2016-17, a significant growth has been observed as compared to last fiscal year.
He said that this year Pakistan exported total 2.59 million metric ton of rice amounting to US$ 1.224 billion, whereas last fiscal year in the same period exports were d 2.27 million metric ton of rice amounting to US$.961 million, which shows a growth of 27pc in terms of values and 14pc in terms of quantity.He said we have come out of the crisis which we have been observing since last three years.
In 8 months of current fiscal year, the country has exported more than 100,000 metric ton of rice amounting to US$ 67 million. Kenya is the largest buyer of Pakistani non-Basmati rice and during eight months of this fiscal year (July to Feb 2018) we have exported 323,000 metric ton of rice amounting to US$ 118 million. He also said that China is the 2nd largest destination for Pakistani Non-Basmati rice. As at the end of February 2018, we have exported 233,000 metric ton of rice valuing US$ 83 million.
Production
Pakistan is the world’s 11th largest producer of rice. Pakistan exports 8pcof world’s total rice trade. It is an important crop in agriculture economy of Pakistan.
In the year 2016-17, Pakistan produced 6.7 million ton, of which around 4 million ton were exported, mainly to neighboring countries, the Middle East and Africa. Rice is grown in fertile lands of Sindh andPunjab regions where millions of farmers rely on rice cultivation as their major source of employment and earning their bread and butter. Among the most famous varieties grown in Pakistan include the Basmati, known for its flavor and quality. Pakistan is a major producer of this variety.
n World Rice Producing Countries
Bangladesh, Bhutan, Bolivia, Brazil, Cambodia, Chad, China ,Cuba,
Guyana ,Haiti, India, Indonesia, Iran, Japan, Laos, Iberia, Madagascar, Mali, Nepal, Pakistan, Philippines, Romania,
n For Seed purpose, different varieties should not be grown adjacent to each other to avoid out crossing. Isolation in time may be a possibility otherwise suitable space isolation could be used effectively.
n Protection from insect pests, diseases and weeds: Crop must be fully protected through cultural practices and pesticide use.
n Rouging: Removal of undesired plants from seed crop is necessary for seed purification. Best rouging time is when the crop is in full flowering stage.
The appropriate harvesting time ranges from 30 to 35 days after flowering when 85 to 95pc panicle becomes straw colored. Keep the harvested crop 2 to 3 days for drying before threshing. Do not harvest seed crop with combines to avoid admixture. Threshing floor should be kept clean during harvesting and threshing operations. After drying andto cleaning, seed should be packed in bags, labeled and stored.
In all parts of the country, rice crop is established by transplanting 30 to35 days old nursery. To get higher yields, recommended sowing and transplanting schedule must be followed.
There are three types of rice varieties cultivated in Pakistan, such as Basmati type, IRRI type and Cold tolerant, bold and short grains. These varieties are area specific depending on environmental conditions.
The rice hybrids are getting popular in the country and so far 54rice hybrids belonging to different Seed Companies have been recommended by PARC Variety Evaluation Committee (VEC) for general cultivation in Sindh, Baluchistan and Southern Punjab mainly.
The rice mainly suffers from bacterial leaf blight, blast and brown leaf spot, stem rot, kernel smut and false smut, which cause substantial losses annually. These diseases can be managed by applying integrated approach. Such as:
n Seed treatment with available seed dresser like Topsin M (70%) WP
n Planting of resistant varieties
n Using fungicides/bactericides, Copper oxychloride, Cobox etc. for BLB, Difenoconazol for blast)
n Balanced fertilizer application
n Crop rotation
n Field sanitation

Rice is a major Pakistani export itemsto the United States. Out of $118 million in Pakistani agricultural products exports to the United States in 2014, rice exports comprised $37.5 million, 32 percent of the total. This was the highest ever Pakistani rice exports to the United States.
Stocks
In 2014-15 ending stocks were forecasted at 1.8 million metric ton while in 2015-16 ending stocks were projected at 2.0 million metric ton.
Policy
Rice trade in Pakistan is carried out by the private sector with little or no intervention from the government. Since the publiclyrun Rice Export Corporation of Pakistan was disbanded 20 years ago, Pakistan’s rice traders have responded well to market liberalization and over the years have become major players in world rice trading. The milling industry made significant investments in state-of-the-art processing machinery, but Pakistan exports most of its rice in bulk with no modern packaging and branding. Export companies could be doing more to develop brands and a more significant presence in foreign markets. However, the export industry is comprised of a large number of relatively small firms that are often familyrun and accustomed to traditional trading practices. However, that is changing and Pakistan’s rice exporters are becoming increasingly active advocates for their industry and their trade interests. The industry is expected to adopt more strategic and brandbased approaches to rice exporting.
Pakistan is likely to witness a revolution in paddy production in next couple of years because of Chinese cooperation with the government and private sector in the field.
The modern hybrid rice varieties are already being sown over 1.5 million acres of land in Sindh, the seed is all set to be commercially launched in different districts of central and southern Punjab in upcoming season. Since the hybrid rice average yield is more than 100 mounds per acre, the cultivation if adopted in Punjab could increase the annual rice production of the country to double digit. The country is 11th largest rice producer in the world with per year production of around 6 million ton.
A world leading Chinese company, Yuan Longing High-tech Agriculture, and Guard Agriculture Research and Services Limited are actively involved in bringing revolution in the country’s rice production. The government has also entered into an agreement with farmers on hybrid rice cultivation technologies to improve per acre crop productivity.
China is world’s major consumer of rice in the world and it imports 30 to 40 percent of its demand from Pakistan. The country’s rice export to neighbor country could become double if its farmers adopt modern method of agriculture. We have the potential to become major seed exporter of this region to increase our per acre yield of rice. No one could stop Pakistan to become major rice exporter of the region if seed revolution reaches in Punjab, said Shah Rukh, a rice expert.
Making Pakistan a hub of rice production is part of agriculture policy under CPEC. He cited the example of Sindh’s Golarchi area of Badin district where according to him hybrid rice is being sown on 450,000 acre, almost 80 percent of cultivation land. The per acre yield is around 120 mound and in some cases to over 140 mound in the area, he said. The bumper crops have brought a pleasant change in the lifestyle of the local community in last couple of years.
Rice Oryza Sativa L. a member of the grass family, along with wheat and corn, is one of the three crops on which the human species largely subsists. Rice is now one of the most important crops at the global level, as it is used as a staple food in most countries of the world and will continue to be for the foreseeable feature. Rice is intimately involved in the culture as well as the food ways and economy of many societies. Indica type rice feeds more than two billion people, predominantly in developing countries. In the coming 30 years, the world will require 70pc more rice than that it requires today. According to conservative estimates, 800 million ton of rice will have to be grown with considerate reduction in the input of agrochemical under sustainable conditions. It has been estimated that half the world’s population subsists wholly or partially on rice. Ninety percent of the world crop is grown and consumed in Asia. American consumption, although increasing, is still only about 11 kg per person annually, as compared with 90 to 181 kg per person in parts of Asia.
Economic Importance of Rice for Pakistan
Rice is the second most important crop which brings economic prosperity of the growers as well as earns billions of rupees through its export for the country. Pakistani fine rice commonly known as Basmati is world famous and enjoys monopoly in the international market, due to its quality characteristics, strong aroma, slender and long kernel, gelatinization, temperature and high degree of grain elongation on cooking. However, the grain yield of basmati rice varieties is very low. In order to remain in the international market, we have to further improve the quality as well as yield of basmati varieties said researchers. Rice plays a pivotal role in the agro-based and occupies a prominent position in agricultural economy of Pakistan.
Rice is a high valued cash crop and is also a major export item. It accounts for 5.7 percent of the total value added in agriculture and 1.3 percent to GDP. Production of rice during 2004-05 was provisionally estimated at 4991 thousand ton, which was 2.9 percent higher than last year. Rice was cultivated on an area of 2503 thousand hectares, showed an increase of 1.7 percent over last year. The higher production was due to favorable weather condition.

Producing Areas
Major producing areas in Pakistan include Gujranwala, Hafizabad, Sheikhupura, Sialkot, Okara of Punjab and Larkana, Jacobabad, Shikarpur, Badin, DaduandThatta districts of Sindh.

Main Varieties
In Pakistan, rice is mainly grown in the Sindh and Punjab. The Sindh is specialized in producing the Long grain white rice IRRI-6 and IRRI-9, while Punjab is producing world class Basmati rice among IRRI-9 and other varieties. Punjab is the biggest producer of rice in the country and contributes 58 percent to national production while the provinces of Sindh, Balochistan and KPK to 29pc and 10 percent, respectively. Some of the important varieties grown in the country are Super Basmati, Kernel Basmati, Basmati 385, IRRI-6, IRRI-9, KS-282, DR-82 and DR-83. All rice is irrigated and mainly transplanted. On an average, each household in Pakistan spends about 3.8 percent of its total food expenditure on rice and rice flour. It is the second staple food and contributes more than 2 million ton to Pakistan’s national food requirement.

Rice Exports
Like India, Pakistan exports both highquality Basmati rice which sells at a premium in highincome markets as well as intermediate and low quality non-aromatic long grain milled rice to developing countries, mostly in East Africa where it competes with China and Vietnam, and in South Asia. Pakistan’s Basmati rice typically sells at a lower price than India’s Basmati. For all rice, Sub-Saharan Africa, Afghanistan, Bangladesh, Indonesia, Middle East and the EU are leading export markets for Pakistan.
Rice exports reached record US$ 932.3 million, showing an extraordinary increase of US$ 297.8 million, 46.9 percent, during FY 05 despite a fall in unit values. Export values of basmati rice and other varieties stood at US$ 439 and US$ 493.6 respectively.
Benefits of Rice Future Contract
Futures exchange but lose in cash market. And the gain covers their losses, so they will take profit.
Commodity Exchanges to act as distribution network to retail agri-finance from Banks to rural households.
Provide trading limit finance to Traders in commodities Exchanges.
Exporters said that they have come out of the crisis which has been observing since last three years. Further with the coordination of REAP Office Bearers with Trade Development Authority of Pakistan and Customs, value of rice export trade is showing improvement which is a good sign for the country. Further, REAP members are putting their untiring efforts and aggressive marketing to increase the rice exports and to earn valuable foreign exchange for the country. Rice exports from Pakistan posted a healthy growth of 27 percent to reach two billion dollar mark in the last fiscal year (FY18). According to Rice Exporters Association of Pakistan (REAP), Pakistan has exported total 4.023 million metric ton of rice amounting to $ 2 billion during FY18 compared to some 3.44 million metric ton rice amounting to $ 1.6 billion exported in FY17, showing a significant growth of 27.7 percent in terms values and 17 percent in terms of quantity.
Itwasindicated in a report that Kenya has been the largest buyer of Pakistani non-basmati rice and has exported 439,000 metric ton of rice amounting to $171 million during the last fiscal. Previously, there was a preferential duty in Kenya for Pakistani rice but later on Kenya has imposed import duty of 35 percent OR $200, whichever is higher, of which rice exports to Kenya is declining. It is requested to Ministry of Commerce, to coordinate Kenyan Government for imposition of preferential duty, so that trade balance between both countries should be stable.
China used to be the 2nd largest buyer of non-basmati rice; however exports to china are also on decline. Pakistan has exported 272,000 metric ton of rice during FY18 compared to 589,000 metric ton of rice in FY17. In the context of CPEC, there are billion dollars investment opportunities and there is need that government of Pakistan must initiate talks with China to include Pakistan in the duty regime like ASEAN countries, so that rice exports to China may again increase. Exporters complained that there is no Research and Development work has been made in rice trade.
One of the largest buyers of Basmati rice was Iran, but due to the non-availability of banking channel, Pakistani rice exporters could not export basmati rice to Iran, the officials said.
Custom department demands overall tax of some 7.5 percent for release of returned commodity container. This is not justified as exporters have already observed huge losses in terms of ports and shipping charges. They appealed the government to waive this huge tax to rice exporters, as despite the 2nd largest export trade this sector has been neglected.
The commodity’s exports have rebounded despite a slower pace of shipments to China shows that exporters know what to do when orders do not come in from the big buyer. Nevertheless, the slowdown has prompted the policymakers to seek tariff concessions from China to help exporters sell more to that country.
During this fiscal year, Pakistan has managed to export more rice to traditional markets like Afghanistan, Kenya, Oman, Qatar, Saudi Arabia, Spain, Tanzania, Britain and the United States, according to senior officials of the Rice Exporters Association of Pakistan (REAP) and trade data based on banking transactions during the first half of this fiscal year.
Rice exports to China plunged to $105m in the previous fiscal year from a peak of $277m in the 2015-16 fiscal years, mainly because of slow demand and in the face of stiff competition with Indonesia, Thailand, Vietnam and the Philippines. These rice exporting countries enjoy relaxed tariffs from China as they are members of the Association of Southeast Asian Nations.
Many exporters continue to export large quantities of unpackaged basmati rice to the United Arab Emirates (UAE) where buyers connected with Indian trade houses package them and re-export elsewhere under Indian brands. Exporters complain the government is doing little to address this issue.
This and other similar issues of branding and seeking recognition of some varieties of rice as basmati grade need proper government-to-government level handling. At the same time, our exporters also need to shift basmati exports from loose to packaged cargoes in 10 to 20kg rice bags.It is said that the pace of shipments suggests the country can meet the full-year targets of 4m ton of exports volume and $2bn of earnings.
As of 2016, Pakistan’s rice sector comprised 22 large processing mills, employing 100 to 500 employees each), nine mid-sized mills (with 50 to 100 employees each) and 76 small mills (each having fewer than 50 employees).
To promote basmati brands of high exports standards, we need more mid-sized and big mills where achieving economies of scale is possible. But this cannot happen without investment. The private sector and the government must ensure additional investment in rice milling for promoting rice exports, particularly those of basmati.
Exports of non-basmati rice continue to do well, as large paddy outputs in recent years have enabled exporters to build and maintain their exportable inventories at relative low cost. Besides, the exporters are now more capable of exploiting requirement gaps in importing countries as and when they appear. In the first half of this fiscal year, exports of non-basmati varieties soared to 1.63m ton from about 1.47mln ton a year ago, resulting in higher earnings of $658.3m against $535.7m, according to official data.
Exporters optimistic of achieving the 4m ton target of rice volume this fiscal year say that rice shipments to Kenya are in full swing. In July-January, Pakistan has exported 284,000 ton of the commodity to the African country.
They say that exports to some major buyers like the UAE, Saudi Arabia, Oman and Afghanistan as well as to European and African markets continue to see a decent rise. An occasional boost in exports to Spain and Bangladesh and some regaining of the lost ground in Chinese markets will also be helpful.