Pakistan’s share in overall basmati export has gradually decreased compared to India. Pakistan exported 409,669 tonnes of basmati rice in July-May fetching $383 million as compared to 439,662 tonnes ($407.7m) in the same period of last year, according to Pakistan Bureau of Statistics. Exports of other rice varieties fell to 2.89m tonnes ($1bn) during the same period as against 3.49m tonnes ($1.31bn) a year ago.
Background
In 2015-16 (FY15-16), the value of Pakistan’s rice exports witnessed a decrease of 8.6%, down to $1.86 billion compared to $2.04 billion in FY14-15. The situation has worsened in the first 11 months (July to May) of the ongoing fiscal year 2016-17 (FY16-17) as rice exports stood at $1.46 billion, down by a massive 17% compared to the already low benchmark of $1.72 billion in the same period of the previous year.
During the preceding fiscal year, rice was sowed on 2,724,000 hectares, almost the same area as compared with a year earlier. Rice production in 2016-17 stood at 6,849,000 tonnes, which was both higher than the year’s target and previous year’s production. Rice area decreased due to decline in domestic prices of rice and growers shifted to sugarcane and maize crop.
Iran was a key importer of Pakistan’s super basmati rice, but the trade came to a virtual halt after the imposition of sanctions on Tehran.
After sanctions and an economic embargo were lifted 14 months back many countries restarted trading with Iran but Pakistan has yet to normalise trade relations with its neighbour. Even during sanctions, there was no food embargo on Iran, and India kept supplying food items including basmati rice to Iran in barter arrangement.
Pakistan, however, ceased trade with Iran, which allowed Indian exporters to capture the Iranian market. Today India exports one million tonnes of Basmati rice worth $1 billion.
Before the imposition of sanctions, Pakistan exported between 300,000 and 400,000 tonnes of super basmati rice to Iran and earned around $300-$400m per annum. Today we can earn up to $500m.