Rice Exports Reach 16-Year Peak in Price
Published on: February 4, 2024.
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Pakistan Rice Exports Set to Reach Record High Amid Indian Restrictions
In the year ending in June, Pakistan’s rice exports are expected to reach a record high due to India’s decision to limit its own shipments. As a result, buyers are turning to Islamabad, which is offering rice at nearly 16-year high prices. The surge in exports is helping to address tight supplies caused by India’s restrictions and will bolster Pakistan’s foreign exchange reserves, which are essential for financing imports.
According to Chela Ram Kewlani, Chairman of the Rice Exporters Association of Pakistan (REAP), there has been strong demand for rice in recent months due to India’s halt in exports. Kewlani stated that Pakistan’s exports could increase from 3.7 million metric tonnes last year to 5 million metric tonnes in the 2023/24 financial year.
Other industry officials are even more optimistic, predicting that exports could reach 5.2 million tonnes, given the significant improvement in production this year. After experiencing a drop in production to 5.5 million tonnes last year due to floods, Pakistan is expected to produce 9 to 9.5 million tonnes of rice in 2023/24, according to a New Delhi-based dealer.
Thanks to higher production and elevated global prices, Pakistan is able to export rice at a rapid pace. In December alone, the country exported around 700,000 tonnes of rice. Basmati rice exports are projected to increase by 60% this year to 950,000 tonnes, while non-basmati exports could surge by 36% to 4.25 million tonnes.
In terms of value, Pakistan’s rice exports are estimated to generate over $3 billion this year, up from $2.1 billion the previous year. Due to India’s absence in the market, buyers are turning to Pakistan, causing local prices to gradually rise despite increased production. Pakistan is currently offering 5% broken white rice at around $640 per tonne and parboiled rice at around $680 per tonne, compared to $465 and $486 per tonne respectively a year ago.
Pakistan primarily exports non-basmati rice to Indonesia, Senegal, Mali, Ivory Coast, and Kenya, while premium basmati rice is exported to the European Union, Qatar, and Saudi Arabia. In the absence of India, Vietnam, Thailand, and Pakistan are trying to fill the gap. However, Pakistan has a freight advantage due to its proximity to buying countries in the Middle East, Europe, and Africa.
A Mumbai-based dealer suggests that India may review its export curbs after the elections in May. Pakistani exporters have already shipped around two-thirds of the year’s shipments and are expected to sell the entire quantity before the end of May.
The record prices that Pakistani farmers are receiving for their paddy are likely to encourage them to expand their planting area in the next season. Kewlani believes that Pakistan will have a bigger surplus for exports in the next season if the weather remains favorable.
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