Grain of Truth

Rice is Pakistan’s major export item in the food group. As per the statistics of the State Bank of Pakistan, the total export value of rice was $2,111 million during FY 2022-23, which constituted around 45% of total food group exports. This indicates the significance of this sector for agriculture and exports. The Rice Exporters Association of Pakistan (REAP) representatives are confident that the rice exports will hit a record $ 3 billion export level this year.

The U.S. Department of Agriculture projected that rice exports may increase to 4.8 million tonnes in the current fiscal year. The Export Advisory Council has also set a target of $10 billion in rice exports by 2030 to diversify its export basket and enter new markets.

China, the UAE, Malaysia, Afghanistan, and Saudi Arabia are major export destinations of Pakistani rice. Russia has registered 15 Pakistani mills for rice exports, which will help increase exports to the Russian market.

The global markets favor Pakistani rice over Indian rice, especially the Basmati variety. It was observed that in the recent past, some Pakistan products, including rice, had been exported from Dubai as an Indian brand to increase the marketing and branding of Indian exporters. However, as per the REAP, the trend has now changed due to quality issues of Indian rice in international markets. Pakistani rice varieties are pest-free and considered of good quality.

Another reason for the increase in rice exports is a ban on rice exports imposed by the Indian government. Food inflation in India has forced the government to put a ban on rice exports, which provided Pakistan an opportunity to grab the market share. Besides India, Vietnam and Thailand are major rice exports in the global market. Indian farmers have access to various high-yielding basmati varieties, whereas Pakistani farmers have access to only one significant variety: Super Basmati. Pakistani farmers’ access to certified seeds is limited and restricts their production capacity to a considerable extent.

The area under cultivation decreased last year due to floods, whereas higher input prices are also a concern for rice-growing farmers. Torrential rains damaged paddy crops, especially in Sindh province, resulting in crop losses last year. It was estimated that around 35% of the standing rice crop in Sindh and 29% in South Punjab were affected by excessive heat waves.

Despite being the major export item, the Pakistan government does not provide any subsidy or support to farmers. The rice sector has not been given industry status, which shows the lack of interest from the government towards promoting the rice sector and its exports. Provision of quality seeds, subsidies, and input are essential elements to boost rice production and export volume. Compliance with commercial and regulatory requirements is a time-consuming process, which should be made easier and hassle-free.

Focusing on value addition in the rice industry and introducing the production of by-products will help increase the overall production level and export volume. Modern technological methods and innovative measures are also helpful in enhancing rice exports. Despite various agriculture research centers and institutes, no new variety of rice has been introduced recently. Importing unique types of seeds from countries such as the Philippines can help increase rice yield in Pakistan.

New markets can be explored to increase rice exports, and Iran could be the one market for basmati rice. However, to tap such markets, the availability of banking channels is required to initiate the trade process. Afghanistan, Senegal, and China are potential markets for broken rice exports. Providing adequate information and advisory services about inputs, high-yield varieties, and production processes are also some of the critical aspects that can assist in improving the rice yield in Pakistan.