Rice exporters concerned over escalating paddy prices

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LAHORE: Escalating paddy prices in Pakistan has caused sheer distress among rice exporters, according to a statement issued by the Rice Exporters Association of Pakistan (REAP) on Tuesday.

 

The paddy prices have increased by over 30 percent last week, owing to what it claimed rumours about less crop and the role of non-traders and investors in the rice trade.

 

“The current high prices have knocked us out of the international competition due to ineffective pricing against our neighboring country India.”

 

The rice export orders have observed an exponential decline of 60 percent than last year, said Samee Ullah Chaudhry, vice chairman of the Rice Exporters Association of Pakistan.

 

“We need to keep regional parity in tact. The Indian Basmati is cheaper than our Super Basmati. We managed to extract USD 100 per ton premium price for our Basmati but the difference in pricing has reached to an ever high levels of USD 250 per ton, which is indigestible by most of the global buyers.”

One of the major reasons of price hike is the role of non-traders in rice trading. The non-trader element is hoarding rice stocks, hence, creating artificial scarcity of the commodity for their undue profitability, resulting in food inflation, he said.

 

“We need to expose and kick those elements out of our rice trade, said by Samee Ullah.

 

Unfortunately, the financial institutions are supporting them with huge banking limits, he said, and warned the financial institutions that such artificial price hike would curb exports.

 

He asked the SBP governor to take serious steps against bankers who are offering limits to such non-traders. It is the role of the central bank to ensure that all financial limits be utilised against the assigned purpose only.

 

Pakistan produces six million tons of rice, while local consumption is just two million tons, he said, adding that the rest of four million tons was exported every year.

 

“India, being much cheaper source, has the advantage / privilege to substitute our international brands shelf space against their cheaper basmati. We will not let that happen.”

 

He said that Pakistani rice exporters have managed to place orders of 200 containers of Indian high quality rice, which is due to arrive at the Karachi Port within next three weeks.

 

The rice will be USD 200 per ton cheaper than our produced Basmati.

 

Samee Ullah warned the banks that the current prices may execute losses to non-traders element hence putting depositor’s money at stake and making them vulnerable to losses.

 

REAP and its members paid USD 20 million to the national exchequer in the form of direct taxes on exports, he said.

 

“Having contributed such a significant amount to the national exchequer and earning the much-needed foreign exchange for the beloved country, I believe the government must initiate steps to safeguard the interests of the rice exporters,” he said.

 

He expressed concern over the silence of the Punjab government that has failed to crackdown on the hoarders, despite such higher prices.

 

Courtesy:  The News


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