KARACHI:Pakistan basmati prices are feared to decrease on account of the depreciating Indian rupee against the dollar. On the other hand, India’s recent curbs on rice exports could provide an opportunity to Pakistan exporters to cash in on the lowered supply from their neighbouring competitor country.
Climate disaster, in the South Asian agro-based economies of India and Pakistan, has started to disturb the international rice market dynamics that have remained stable for decades.
Rice Market Expert, Hamid Malik believes, “Pakistani basmati is facing strong tail and headwinds this October.”
“The Pakistani Basmati Paddy 1509 is experiencing strong headwinds due to the rapidly depreciating Indian rupee, which has lost almost 7% value in just 30 days against the US dollar, going from INR79.8 to 83.04,” he explained.
“In the last week of September, Basmati 1509 started with a price above Rs4,000 per 40 kilograms. In two weeks, prices came down to Rs3,200 for a short period but then started going up and the same is now being traded at Rs3,525-Rs3,700,” he explained.
Meanwhile, he noted, “Indian basmati 1509 prices also started on a high note at INR3,800-INR3,900 per quintal but came down to INR2,900 to INR3,000 – $380 per tonne as compared to the Pakistan 1509 Paddy at $366 per tonne – $14 per tonne less than the Indian basmati.”
“Now, in India, the price of 1509 has inched up a little since last week to $397 per tonne while the price of the Pakistani 1509 stands at Rs 3,550 per 40 kilograms, which is between $403-412 per tonne,” he added.
Union of Small and Medium Enterprises (UNISAME) President, Zulfikar Thaver emphasised that “the quality of our super basmati rice is far superior to Indian basmati rice. Pakistani basmati has more aroma and a better taste and length, which is a natural blessing. Because of this, we have an edge and even our 1121 has aroma which the Indian 1121 lacks.”
“We are in a position to overcome the Indian rupee depreciation because even our rupee has depreciated and our exporters are getting more rupees to a dollar. Even before the depreciation of the rupee, we were getting a better price as compared to India in the international markets. Nevertheless, our exporters and TDAP must make serious efforts for more penetration in the global markets and we need to improve our strategies, including our packing,” Thaver said.
Commenting on potential roadblocks, Malik said, “Pakistan miller’s dilemma is that the 1509 crop looks shorter than expected even though our per acre production is 10-12% higher than last year. And supplies of 1509 from growers are drying up but will be available from stock or commission agents.”
Pakistan Businesses Forum (PBF) Vice President, Ahmad Jawad argued, “On the flip side, the Indian curb can trigger a rally in global prices after more than a decade of stability as New Delhi’s protectionist move coincides with falling output in other major producers and rising global demand.”
“Uneven monsoon rains hit rice plantings in India, prompting the export restrictions in September, and floods have cut output in Pakistan even as consumption has grown in top importers such as Bangladesh and the Philippines. That’s why forecasters are saying global demand will outstrip production in 2022/23,”
he added.
“The US Department of Agriculture (USDA) has cut its global rice production estimate for 2022/23 to 508 million tonnes, the lowest in four years. Just a month ago, the USDA was expecting output for the year at 512 million tonnes,” noted Jawad.
The PBF VP, however, expects a sharper fall to around 500 million tonnes because of the extreme weather conditions threatening crop yields in countries like China, India, Bangladesh and Pakistan.
“In India, dry weather conditions delayed the sowing of rice, with many farmers not planting the crop at all, and then torrential rains damaged ripening paddy fields, raising concerns about food inflation,” he explained.
“Pakistan produces around 8.9 million tonnes of rice annually, whereas only four million tonnes are consumed in the country, leaving the rest for rice exporters . Therefore, India’s ban offers a lucrative opportunity for Pakistan to expand its rice exports and fetch better prices,” he encouraged.
Given the recent floods in Pakistan, Jawad said, “The floods washed away millions of acres of standing rice crops in Sindh and Punjab, with total crop losses estimated at around 2.2 million tonnes, most of which are non-Basmati (coarse) varieties.”
“Pakistan could opt for a cautious policy allowing the unabated export of Basmati rice, hoping to meet 750,000 tonnes of exporters , but restrict the export of non-basmati (coarse) rice at two million tonnes,” suggested the PBF VP.
