Pakistan and Sri Lanka dispute over basmati trade quota utilization under FTA
Published on: January 11, 2024.
Filed under:
Pakistan and Sri Lanka are currently facing a dispute over basmati rice exports. Pakistan has a quota of 6,000 tonnes under a free trade agreement with Colombo, but has been unable to fully utilize it. This has raised questions about the inclusion of Indian basmati variety 1121 in Pakistan’s shipments to Sri Lanka.
One of the main reasons for Pakistan’s inability to utilize its quota is the delay in Sri Lanka clearing the rice consignments. Sri Lanka has suspicions about possible adulteration of the rice from Pakistan. Pakistan argues that its rice consignments are certified by three different organizations, including a certificate of origin.
There are two key issues in this dispute. Firstly, Sri Lanka is not convinced about Pakistan’s testing protocols for the rice. Secondly, the prices of the rice exported to Colombo are lower than the global market rates, leading to suspicions of adulteration. This raises concerns about potential health issues.
On the other hand, India has a case to protest against the inclusion of the 1121 basmati variety in the Sri Lanka-Pakistan FTA list. The trade sources argue that the 1121 variety is originally Indian and that India should take advantage of Pakistan’s dispute with Sri Lanka to gain a stronger foothold in the global market, especially in the European Union and the Gulf region.
During the first half of the current fiscal year, basmati exports from India increased to 2.6 million tonnes valued at ₹2.61 billion. This indicates the potential for India to further expand its market presence in the future.
Overall, the dispute between Pakistan and Sri Lanka over basmati rice exports highlights the challenges and opportunities in the international rice trade. It also emphasizes the importance of maintaining transparency and quality standards in order to ensure the trust and satisfaction of trading partners.
Source
