Global Rice News

Pakistan’s rice exports during the current financial year are projected to reach $3.5 billion, falling short of the $4 billion target. Despite this, the $1 billion increase from the previous year’s record of $2.5 billion is the largest ever in history. It also represents an 81% year-on-year increase, the highest percentage increase ever recorded in the country’s history.

Rice exports now rank as the second largest category in Pakistan’s goods export scorecard, surpassing woven garments, bed linen, home textiles, and cotton fabric. The only category it falls behind is knitwear. If Pakistan increases its export volume by just one million metric tons, rice exports could become the country’s largest export. Currently, Pakistani rice dominates 11% of global rice trade, the highest market share among all goods export categories at the HS-2 level. Pakistan remains the fourth largest rice exporter, trailing behind India, Thailand, and Vietnam.

The challenge for Pakistan lies in surpassing Thailand and Vietnam to become the second largest rice exporter in the future. Traditional major exporters such as India, Thailand, and Vietnam are facing challenges due to increasing population, rising income levels, extreme weather events, and adverse climatic conditions. These factors are reducing their exportable surpluses. While the US has a significant exportable surplus, it is unable to meet the demand gap in the Western Hemisphere. Moreover, exporting US-origin rice to Asia and Africa is not attractive due to the freight disadvantage. This situation presents a unique advantage for Pakistani rice in these markets.

Pakistan’s advantage in rice cultivation stems from the fact that local consumption is lower than exports, a rarity in the country. Unlike other staple grains, rice is not the primary grain staple for Pakistan due to its semi-arid climatic conditions, which are unsuitable for rice cultivation. Rice thrives in hot and humid tropical climates with ample rainfall, not dependent on canal-fed irrigation.

In contrast, Pakistan relies heavily on canal-fed irrigation for rice cultivation. Water experts argue that if the cost of canal water consumption for rice cultivation were priced at market rates, Pakistani growers would stop cultivating rice altogether. The $4 billion annual rice export opportunity is heavily dependent on water subsidies, which are unsustainable in a water-stressed country where future canal water availability is uncertain.

While the surge in rice exports is commendable, it is important not to become overly reliant on it. The success of the rice export industry is not guaranteed and poses risks for a country where it accounts for 15% of total goods export earnings.

Congratulations on the current windfall, but it is crucial to consider the long-term sustainability of rice exports.

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