Basmati Rice Export From Pakistan

Basmati Rice

Basmati is a variety of long grain rice grown in subcontinent, particularly in Pakistan and India, notable for its fragrance and delicate, nuanced flavour.

Rice, an important food and cash crop, is the third largest crop of Pakistan after wheat and cotton. It is planted on an area of over 2.5 million ha (11% of the total cropped area) and accounts for 17% of the total cereals produced annually. The annual production of milled rice is about 5.5 million tonnes sharing 5.5% in agriculture sector and 1.1% in GDP. Pakistan is famous for growing and exporting long grain aromatic Basmati rice. Rice exports hovering around three million tonnes per annum have accounted for 5% of the foreign exchange from merchandize exports. The rice export increased manifold during the recent years and a record export of 3.69 million tonnes of worth about Rs.70 billion was made during 2005-06. The country ranks 14th in terms of rice production and 6th in rice export in the world.

In Pakistan, rice is grown under diverse climatic and edaphic conditions. Basmati predominates in traditional rice tracts of Punjab (Zone II). In Swat (Zone I) at high altitude mountain valleys, cold tolerant rices are grown. In the south of NWFP, Sindh and Balochistan (Zone III and IV), IRRI type medium long grain heat tolerant tropical rices are grown. Pakistan exports both premium priced basmati rice to higher countries, as well as low quality non-aromatic long grain regular miller rice to developing countries.

History of Rice Export from Pakistan

Principal markets for Pakistan’s basmati rice are the Middle East, the EU, and the United States. Russian, South Africa, East Africa, other sub-Saharan Africa, and the Middle East are major export markets for Pakistan’s non-Basmati Rice. Although Pakistan choose not to devalue the rupee in 1949 along with other countries in the sterling area, the country was able until 1952 to pursue a liberal import policy because, the Korean war commodity boom resulted in a large increase in demand for Pakistan’s major export commodities, cotton and Jute. Under the Open General Licensing (OGL) system, import licenses could be obtained to import any product.

After the Korean War, however, the demand for Pakistani products slumped, and foreign exchange earnings declined sharply. The government resorted to import controls but delayed the decision to devalue the rupee until 1956. Import licenses were awarded for imports of Capital and intermediate goods to those who have obtained sanctions from the government for setting up industries. Import licenses were also distributed to “category holders” (traders who had imported under OGL system) in proportions of their imports in 1951/52. The latter licenses were used mainly for consumer goods. Since, at the prevailing

prices, the demand for both consumer goods and intermediate goods far exceeded their supplies, a black market on licenses developed on massive scale.

At the same time, cotton and jute exports were subjected to export duties and there was a ban on exports of most other agricultural goods. Inadequate price incentives contributed to a decline in the real value of total exports from $336 million in 1952/53 to US$ 95 million in 1958/59.

While various schemes were set up to restrict imports and allocate import licenses, export taxes were gradually reduced and eventually eliminated and exports were encouraged through various incentives. Most important was export bonus scheme, introduced in 1959.

 

 

 

 

 

 

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