Rice traders need govt support to arrest declining exports

KARACHI: Basmati rice exporters are in dire of government’s support in form of incentives or rebate as the country’s premier commodity is fast loosing its global market share to neighbouring India, said an industry official. 

“Annual Basmati rice exports, which stood at one billion dollars four years back, have now shrunk to $550 million (a year) as the commodity is becoming uncompetitive against Indian and Bangladesh products,” Tariq Ghori, director of Matco Foods, marketing rice under brand name Falak, told The News. 

Matco Foods is a leading agribusiness and its basmati rice exports amounted to $80 million so far during the fiscal year.

Rice exports fell 15 percent to $1.033 billion during the first eight months of the current fiscal year. Particularly, Basmati exports decreased 17 percent to $249 million in the July-February period of 2016/17.  

Ghori, during the 14th My Karachi Exhibition at Expo Centre, said the government announced incentive package to boost basmati rice exports, but it is not yet implemented. 

He said government also announced credit risk insurance four years ago and it is also on paper. “Governments of India and Bangladesh greatly support their exporters and producers,” Ghori said. “Indian government provides credit risk insurance to their basmati exporters.”

Matco Foods is showcasing its wide range of products at the exhibition along with its flagship brand Falak. The brand launched in 1999 with a vision to make it the premier rice brand in Pakistan. Falak basmati rice is also available in 45 countries.  

Ghori said Pakistani rupee has not depreciated since long, while currencies of neighbouring countries lost value against the dollar. 

Rupee devaluation is in benefit of exporters as they earn good value for their exports. 

Appreciative rupee, he added, rendered Pakistani commodity uncompetitive against the competitors.

The industry official is, however, not in favour of rupee depreciation to arrest exports decline.  

“Pakistan’s imports are more than double than the exports and devaluation of rupee is not recommended,” he said. “However, if government provides four to five rupees a dollar rebate on basmati rice exports, it would have a quick positive impact.”