Rice imports from Pakistan may increase

Rice traders in the UAE expect an increase in rice imports from Pakistan starting next month due to a bumper harvest there. Despite this, however, the pressure on rice supply will remain for some more time, they said.

Leading rice factories and traders in the UAE are getting ready to procure Pakistani rice as the harvest season starts in the first week of November. An official from Gulf Rice Mills said: "Pakistani rice is currently available in the market. We are getting ready to start procuring rice from Pakistan and the harvest season is expected to be good."

The company obtains rice supply from Pakistan, India and other sources to process and market as a branded product in the local market.

According to Mohammed Azar Akhtar, Chairman of the Rice Exporters Association of Pakistan (REAP), an agricultural trade body with 1,000 members, Pakistani rice exports are worth $2.5 billion (Dh9.18bn) per year and the target is to raise them to $4bn through value addition and crop improvement.

Pakistan's Ministry of Commerce, which imposed a minimum export price of $1,500 per tonne for super basmati rice and $1,300 per tonne for basmati rice in August this year, has recently eased the restriction in anticipation of the bumper harvest in November.

Rice accounts for about eight per cent of Pakistani exports and 12 per cent of Gross Domestic Product. The ban on Indian rice export has helped Pakistani exporters to capture new markets, but traders are worried about the declining international rice price and electricity shortage in the mill areas.

Atiq Rahman, Marketing Co-ordinator, Al Ahlia General Trading, Fujiaraha, said the price of rice has been coming down and there are enough quantities of the cereal available in the market.

"The Pakistani harvest season means we will get an increased rice supply. Already, bulk quantities are available in the market and the price of basmati and non-basmati rice is going down. Many rice traders from the UAE procure rice directly from Pakistan," he said.

According to the International Rice Research Institute, (IRRI), world rice production in 2007 was approximately 645 million tonnes.

At least 114 countries grow rice and more than 50 have an annual production of 100,000 tonnes or more. Asian farmers produce about 90 per cent of the total, with two countries – China and India – growing more than half the total crop.

Pakistan's total rice production in 2008 is expected to be 6.5 million tonnes. Even if the rice supply from Pakistan improves, the pressure on the commodity will continue because of Pakistan's small share in the total production, rice traders said.

REAP has been lobbying with the Pakistani government not to introduce a blanket export ban and to impose only a maximum export price ceiling. In addition, the introduction of contract farming and corporate farming, especially by investors from the Gulf, will enhance Pakistani rice production. REAP is also planning to introduce two high yielding basmati rice varieties – Basmati 515 Seed and 99417 Advance Line.

Amith K Sethi, Managing Director, Asia Africa General Trading, a leading rice and commodity dealer, said the company is closely watching the market situation.

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