Global Rice News

Pakistan’s rice exports have reached an impressive milestone, exceeding $2.1 billion in the first seven months of FY24. This figure has already surpassed the total earnings for the previous fiscal year, 2022-23. The growth in rice exports during this period has been remarkable, with earnings doubling compared to the corresponding period last year. It is highly likely that annual rice earnings for this fiscal year will exceed the psychological barrier of three billion dollars, a never-before-seen achievement in history.

The increase in rice exports has played a crucial role in driving the overall growth of the country’s goods exports. In fact, during the first seven months of FY24, the goods exports segment has achieved record earnings of $17.8 billion, surpassing the previous peak earnings of 7MFY22. It is worth noting that 7MFY22 was the last year of significant economic growth in Pakistan, with goods exports reaching $32 billion for the full financial year. Unfortunately, the following year, FY23, saw a decline in goods exports to $28 billion.

While rice exports are contributing significantly to the country’s export earnings, it is unlikely that they alone will set a new record for the full-year report card. The textile exports sector, which is the leading export group, is facing challenges to maintain last year’s export earnings levels. Therefore, the incremental earnings of $1 – $1.5 billion dollars from rice exporters can only partially compensate for the three billion dollars lost by the textile industry compared to FY22. The textile and garments industry had achieved export earnings of $19.5 billion in FY22, but this dropped by 13 percent in the following year.

Despite the economic challenges, the remarkable performance of the rice industry deserves recognition. Unlike the favorable conditions that supported the growth of the textile industry in FY22, the rice industry has thrived amid adverse circumstances. The country currently has record-high borrowing rates, frequent energy tariff hikes, and global commodity prices, including rice, that are beginning to stabilize.

However, the factors driving the rice industry’s success in the current fiscal year are not likely to be sustainable. It is now expected that India, Pakistan’s major competitor in rice exports, will not lift its export ban during this fiscal year to control inflation until after the general elections. This ban will likely continue until the BJP government is securely re-elected. When the export ban is eventually lifted, which is expected to happen in fiscal year 2024-25, global rice prices, especially those from South Asian countries, will witness a significant decline within weeks or even days.

This situation could become even more challenging for Pakistan’s rice industry if India delays lifting the export ban and decides to monitor the market until the next harvest season in November 2024. This delay could lead to Pakistani rice farmers planting more rice acres in anticipation of another successful export year, only to face weakened prices in the market. Moreover, if the domestic economic conditions remain precarious, with high financing rates and subdued domestic demand, the local rice industry might experience a different financial performance in the coming years.

We wish the best of luck to the top performers of FY24 for the next year!

Source: [BRecorder](https://www.brecorder.com)