Global Rice News

Pakistan Rice Exports Reach New Heights Amid Indian Sales Ban

Pakistan has witnessed a significant increase in its rice exports to global markets as it capitalizes on trade restrictions imposed by India, the world’s largest exporter. According to official statistics, rice exports from Pakistan, the fourth-largest exporter, have soared to nearly 5.6 million tonnes in the 11 months leading up to May. This represents a remarkable 60% surge compared to the same period last year. The total value of Pakistan’s rice exports during this period has reached $3.6 billion, a significant increase from the $2 billion recorded from July to May in the previous year. It is worth noting that Pakistan’s previous record for rice exports was 4.8 million metric tonnes, valued at approximately $2.5 billion in the year 2021-22.

This surge in rice exports can be attributed to India’s decision to impose export restrictions on certain types of rice. The aim of these restrictions was to control rising domestic prices ahead of parliamentary elections following a volatile monsoon season that disrupted production and raised concerns about a potential shortage of supply. Elvis John, an associate editor for agricultural markets at S&P Global Commodity Insights, explains, “With India imposing export restrictions… Pakistan emerged as a low-cost alternative.” As a result, many price-sensitive markets in Africa turned to Pakistan to fulfill their demand for rice. This shift towards Pakistan was evident in the markets of Southeast Asia and the Americas as well.

The Pakistani government revealed in its annual economic survey that Pakistan produced almost 10 million tonnes of rice in the nine months leading up to March. This is a significant increase compared to the 7.3 million tonnes produced during the same period in the previous year. Faizan Ghori, director of Matco Foods, Pakistan’s largest basmati rice exporter, attributes this growth to India’s export ban. Ghori explains that despite the devastating floods in the summer of 2022, which resulted in a particularly low crop for the year 2022-23, the current growth in exports is still impressive, amounting to approximately 20%.

The increase in rice exports has brought much-needed foreign exchange earnings for Pakistan, which is currently facing challenges such as double-digit inflation, sluggish economic growth, and soaring public debt. Additionally, global rice prices have reached a decade high following India’s implementation of export restrictions in July. This has had a particularly significant impact on poorer countries in Africa, who typically rely on India for their rice supplies. Joseph Glauber, a senior research fellow at the International Food Policy Research Institute, expects rice prices to remain high until India lifts the export ban.

Despite the export ban, India remains the largest supplier of rice globally, followed by Thailand, Vietnam, and Pakistan. However, Pakistan has successfully increased its market share, currently accounting for about 10% of the global market compared to 7% in the previous year. Hammad Attique, director of sales and marketing at Latif Rice Mills in Lahore, notes that the company has witnessed a surge in demand and orders from the Middle East, Africa, and Southeast Asia, regions where Indian-origin rice traditionally dominates. These buyers have been compelled to purchase from Pakistan, even at higher rates than India, due to the price spike resulting from the export restrictions. Faizan Ghori points out that exports could have been even higher if shipping routes had not been disrupted by the ongoing Red Sea crisis, involving attacks on commercial ships since November last year.

Analysts predict that Pakistan will have another bumper harvest this year. However, farmers in the country may face falling prices for their crop if India eventually ends or significantly relaxes its export policy. Joseph Glauber speculates, “The market has expected India to relax their restrictions following the elections, so we’ll see.” This speculation refers to the six-week-long poll that resulted in Prime Minister Narendra Modi retaining his position.

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