Pakistan-Iran barter launch to brighten energy, food trade prospects

LAHORE: Well-known industrialist Shahzad Ali Malik has said that there was vast potential in energy and food sector under Pak-Iran barter trade, and his group planned to launch business relations in collaboration with other local companies.

Exclusively talking to a select great of journalists on Wednesday, Malik said that Iran has been a big market for Pakistani basmati rice, on which India’s supremacy was gradually established due to multiple factors.

Primarily, high cost of production rendered Pakistani rice uncompetitive in Iran against low cost imports from India. However, due to the better strategy of the current government, favourable competition has become possible for local exporters to trade the best type of basmati rice from Pakistan under barter trade.

Rice trade between India and Iran has been on decline lately due to various factors, he said, adding that negotiations with a local company for the import of LPG from Iran in exchange for rice have reached an advanced stage.

Malik expressed hope that due to barter trade with Iran, Russia and Central Asian states as well as locally developed high yielding hybrid rice seed, there was a possibility of doubling Pakistan’s rice exports to $5 billion dollars in the next five years.

He explained that the total export of rice currently stands at around $2.5 billion and with favourable trade policies and the introduction of new varieties of hybrid rice by the private sector, the total trade volume of rice export could reach $5 billion in the next five years.

Talking about the role of Gard Agricultural Research and Services, he said that the local hybrid rice seed production has increased from 10 percent to 55 percent in the last ten years and it is expected to be 60 percent next year.

The yield of hybrid non-basmati rice has increased to 100 maunds per acre. Whereas the production of basmati in Pakistan is also better than India where it is barely 40 to 50 maunds.

He described the steps taken for the improvement of agriculture in the federal budget as a welcome step, under which duty exemption on agricultural machinery has also been given. But he urged to allot land on lease for seed trials to seed research and manufacturing companies at local level.

Malik said that there is a substantial increase in the production of hybrid seeds of various crops, so there is a need to focus on their research and development. It may be noted that Pakistan exports paper and paperboard, rice and stationary products to Iran while it imports LPG, other mineral fuels and electrical energy from Iran.

The potential for trade between the two countries is immense with the top 20 high potential export items for Pakistan having a potential of $1.9 billion.

According to a report, total annualised demand of LPG in Pakistan is estimated at around 1.5 million tonnes, of which around 850,000 tonnes are produced locally, and the balance needs to be imported from neighbouring countries.

Local demand of LPG is on increase constantly, while it local production is stagnant. So, with increase in local demand the import would tend to increase. Pakistan is importing LPG through sea from Middle Eastern countries and land route from Iran.