PAKISTAN- Pakistan’s rice exports are poised to reach an all-time high in the fiscal year ending in June, as restrictions on Indian shipments lead global buyers to turn to Islamabad for their grain needs, with prices hitting a nearly 16-year high.
The surge in exports is helping to ease tight global supplies following India’s imposition of restrictions last year, which is significant given India’s status as the world’s largest rice exporter. This boom is also expected to bolster Pakistan’s foreign exchange reserves, which play a crucial role in financing the country’s imports.
Chela Ram Kewlani, Chairman of the Rice Exporters Association of Pakistan (REAP), stated, “We’ve seen solid demand for rice in the last few months, mainly because India stopped exporting.”
India, responsible for almost 40% of globally traded rice, surprised the market last year by banning non-basmati white rice exports and imposing an export duty on parboiled rice.
According to Kewlani, Pakistan’s rice exports could surge to 5 million metric tons in the 2023/24 financial year, a substantial increase from the previous year’s 3.7 million tons. Some industry officials are even more optimistic, suggesting exports could reach 5.2 million tons due to a significant improvement in production this year.
After facing production challenges due to floods that led to a low output of 5.5 million tons last year, Pakistan is expected to produce 9 to 9.5 million tons of rice in 2023/24, according to a New Delhi-based dealer.
The combination of higher production and elevated global prices has enabled Pakistan to export rapidly. In December alone, Pakistan exported around 700,000 tons of rice, highlighting the country’s increasing role in the global market.
Basmati rice exports are expected to surge by 60% to 950,000 tons, while non-basmati exports could see a 36% increase to 4.25 million tons, according to industry insiders.
Pakistan’s rice exports are projected to exceed US$3 billion this year, up from the previous year’s US$2.1 billion, according to Aadil Nakhoda, an assistant professor at the Karachi-based Institute of Business Administration.
Traditionally, India offered non-basmati rice at a lower price than Pakistan. However, with India’s absence from the market, buyers are turning to Pakistan, resulting in a gradual rise in local prices despite higher production.
Hammad Attique, Director of Sales & Marketing at Lahore-based Latif Rice Mills, noted, “Pakistan is offering 5% broken white rice at around US$640 per ton and parboiled rice around US$680 per ton, up from US$465 and US$486 respectively a year ago.”
While Pakistan currently exports non-basmati rice mainly to Indonesia, Senegal, Mali, Ivory Coast, and Kenya, it exports premium basmati rice to the European Union, Qatar, and Saudi Arabia.
In the absence of India, Vietnam, Thailand, and Pakistan are working to fill the gap. However, Pakistan’s relative proximity to buying countries in the Middle East, Europe, and Africa is giving it a freight advantage, according to a Mumbai-based dealer.
The dealer mentioned that “India is likely to review export curbs after the elections in May. Pakistani exporters have already shipped around two-thirds of the entire year’s shipments, and they are expected to sell the entire quantity before May-end.”
Encouraged by record prices for their paddy, Pakistani farmers are likely to expand planting areas in the next season, ensuring a bigger surplus for exports if weather conditions are favorable, said Kewlani.
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