Rice exporters miffed by rising paddy price
November 14, 2012
Escalating paddy price has caused sheer distress amongst rice exporters. Paddy prices in Pakistan has increased over 30 percent in past week owing to misleading news about less crop and role of hoarders and investors in rice trade.
‘The current high prices have knocked us out of the international competition due to ineffective pricing against our neighbouring country India. The rice export orders have observed an exponential decline of 60 percent than last year,’ said Samee Ullah Chaudhry, Vice Chairman Rice Exporters Association of Pakistan.
In a statement issued here Tuesday, he said, “we need to keep regional parity intact; the Indian Basmati is cheaper than our Super Basmati. We managed to earn US $-100 per metric ton premium for our Basmati but the difference in pricing has reached to ever high levels of US $-250 per metric ton, which is indigestible by most of the global buyers. He termed one of the major reasons of price increase as hoarders in rice trade.
The hoarders are creating an artificial scarcity of commodity for their undue profitability resulting in food inflation, said Chaudhry Samee Ullah, Vice Chairman REAP. Unfortunately, the financial institutions are supporting them with huge banking limits. He warned the financial institutions that such artificial price hike would curb exports blatantly. He further asked the Governor SBP to take serious steps against bankers who were offering limits to such non-traders. It’s the role of monetary bank to make sure that all financial limits be utilised against the assigned purpose only, he was of the view.
Pakistan produces 6 million tons of rice while local consumption is just 2 million tons, rest 4 million tons have to export globally. If the price would remain at such high levels and we are unable to export, the rice will be sold like sugarcane chops selling in local markets.
Further, he added: “India, being much cheaper source, has the advantage/privilege to substitute our international Brand’s shelf space against their cheaper quality Basmati”. He also informed that Pak rice exporters have managed to place orders of 200 containers of Indian high quality rice, which is due to arrive at Karachi Port within next 3-week. The rice will be US $-200 PMT cheaper than our produced Basmati. “We can’t afford to lose our brand space and let our people die with hunger just for the sake of profitability of these hoarders.
Chaudhry Samee Ullah expressed his deeper concern over the silence of Punjab Government that has failed to crack down on the hoarders despite such higher prices. “It’s the responsibility of the Punjab Government to curb the prices down so that food inflation doesn’t affect our people. This is not possible without a major crackdown on hoarders’ mafia”. Punjab Government should devise a strategy that each grain stored outside rice mills’ premises shall be seized and liquidated in market on public interest.