Pakistan’s rice exports witnessed a significant decline of 17.33% in the first two months of the current fiscal year, with the country exporting over 340,237 metric tons of rice worth approximately $233,991 million, according to data released by the statistics office on September 20, 2023. This decline in rice exports highlights the challenges facing Pakistan’s agriculture sector during the current fiscal year, as global dynamics continue to impact trade patterns.
In the corresponding months of the previous fiscal year (July-August 2022), Pakistan exported a total of 507,144 metric tons of rice, earning revenues of about $283,056 million. However, amidst this decline, there is a bright side as Basmati rice exports increased by 8.29% during the same period, indicating that high-quality Pakistani Basmati rice is still in demand globally.
In addition to rice, Pakistan also achieved gains amounting to about 39,338 million dollars by exporting about 20,539 metric tons of fish and fishery products during the first two months of the current fiscal year. However, total exports of food commodities saw a modest decline of 1.65%, to a total of $711,748 million, compared to $723,696 million during the same period last year. These fluctuations can be attributed to global market fluctuations, trade restrictions and economic uncertainties.
Looking ahead, the Rice Exporters Association of Pakistan (REAP) expressed optimism on September 21, 2023, stating that rice exports for the current year are expected to exceed the record $3 billion, providing a major boost to the country’s economy. The improvement in rice crop production during the current year is considered a major factor contributing to these positive expectations, especially compared to the previous year, which was marred by devastating floods.
To fully exploit this opportunity and achieve greater rice exports, REAP urged the government to formulate a long-term strategy in consultation with stakeholders to reach the ambitious target of exporting $5 billion rice annually. This long-term policy should include measures such as the provision of high-quality seeds, subsidies, agricultural input subsidies, and active marketing efforts.
One of the big hurdles facing rice exporters is the high tariffs imposed by various countries. REAP emphasizes the importance of including the rice sector in Free Trade Agreements (FTAs) with various countries to reduce tariff barriers and facilitate smoother rice exports.
Moreover, the approval of the Global Indicators (GI) Act in Pakistan is expected to create significant opportunities to boost economic and business activities in the international market. The Geographical Indications Law would pave the way for the export of many agricultural and commercial commodities, including rice, in the global market.
However, recent developments in the rice market have created a unique opportunity for Pakistan. In August 2023, India, the world’s largest rice exporter, announced a ban on the export of all types of rice except the aromatic and high-quality Basmati variety. This decision caused a sudden shortage of over 10 million tons of rice in the international market, leading to panic buying in various countries.
With such a significant shortage in rice supplies, countries like Pakistan, Thailand and Vietnam are preparing to increase their rice exports to fill the gap created by India’s ban on exports. Pakistan, in particular, has the potential to export a large amount of rice, given its expected yield of over 9 million tons. However, the government faces a dilemma, as increasing exports may lead to higher domestic rice prices and worsen inflation, which is already a pressing issue in the country.
Ultimately, Pakistan must carefully weigh the benefits of foreign exchange earnings against the potential negative impact on domestic consumers. This decision is crucial not only for the rice sector but also for the economy as a whole, as the rice industry plays a vital role in export earnings, employment, rural development and poverty alleviation in Pakistan. To achieve long-term competitiveness in the global rice market, Pakistan will need to make major improvements to its agricultural systems, including adopting modern agricultural practices and introducing innovations in rice production and processing.
In conclusion, despite the enormity of the challenges, Pakistan’s rice sector has the potential to boost the country’s export earnings and strengthen its economy. It remains to be seen how the government will handle the complex trade-offs between short-term gains and long-term sustainability in this vital sector.