Indian curbs to propel Pakistan's rice exports towards record high

Due to competitor India’s decision to reduce its own shipments, Pakistan is expected to export more rice than ever before in the year that ends in June. This is because Islamabad is selling the grain at rates that are over 16 years higher than they have been in the past. The world’s largest exporter, India, placed curbs on shipments last year. The record exports are relieving some of those restrictions and will help Pakistan replenish its depleted foreign exchange reserves, which are essential for paying for imports. “We’ve seen a solid demand for rice in the last few months, mainly because India stopped exporting,” Chela Ram Kewlani, chairman of Rice Exporters Association of Pakistan (REAP) told Reuters. India, which ships about 40% of global rice, unexpectedly prohibited shipments of non-basmati white rice last year and placed export duties on parboiled rice. Pakistan’s exports might reach 5 million metric tonnes in the fiscal year 2023/24, up from 3.7 million tonnes the previous year, according to Kewlani. Some industry experts are even more enthusiastic, predicting that shipments may exceed 5.2 million tonnes this year, given the significant increase in output. According to a New Delhi-based dealer with a multinational trading business, Pakistan might produce 9 to 9.5 million tonnes of rice in 2023/24, up from 5.5 million tonnes the previous year due to floods. “Higher production and elevated global prices are allowing Pakistan to export at a rapid pace. In December alone Pakistan exported around 700,000 tons of rice,” the dealer said. Basmati rice exports could jump 60% this year to 950,000 tons, while non-basmati exports could surge 36% to 4.25 million tons, he said. In terms of value, Pakistan’s rice exports could fetch more than $3 billion this year, an increase from the previous year’s $2.1 billion, said Aadil Nakhoda, assistant Professor at Karachi-based Institute of Business Administration. Traditionally, India offered non-basmati rice at a lower price than Pakistan. However, with India out of the market, buyers are switching to Pakistan, and local prices are gradually rising despite higher production, said Hammad Attique, director, sales & marketing at Lahore-based Latif Rice Mills. Pakistan is offering 5% broken white rice at around $640 per ton and parboiled rice around $680 per ton, up from $465 and $486 respectively a year ago. Pakistan currently exports non-basmati rice mainly to Indonesia, Senegal, Mali, Ivory Coast, and Kenya and premium basmati rice to the European Union, Qatar and Saudi Arabia, dealers said. In India’s absence, Vietnam, Thailand, and Pakistan are trying to fill the gap. However, Pakistan’s relative proximity to buying countries in the Middle East, Europe and Africa is providing it with a freight advantage, said a Mumbai-based dealer. “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,” the dealer said. Pakistani farmers have been getting record prices for their paddy, which is likely to encourage them to expand planting area in the next season, said Kewlani. “Even in the next season Pakistan will have a bigger surplus for exports if weather supports,” he said.