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Pakistan has benefited from the export ban imposed by India, the world’s largest rice exporter, and is selling record volumes of rice to the global market.
Rice exports from Pakistan, the world’s fourth-largest rice exporter, surged to about 5.6 million tonnes in the 11 months to the end of May, up about 60 percent from the same period last year, according to official figures.
Pakistan’s rice exports increased to $3.6 billion during the period from $2 billion in July-May 2022/23. The previous record was 4.8 million tonnes of rice exported in 2021/22, with export value of around $2.5 billion.
The boom comes after India decided last year to impose export restrictions on certain varieties of rice to tame rising domestic prices ahead of parliamentary elections after erratic monsoons disrupted production and raised concerns about supply shortages.
“As India imposes export restrictions, Pakistan has emerged as a low-cost alternative,” said Elvis John, deputy editor for agricultural markets at S&P Global Commodity Insights.
“Many price-sensitive African destinations have turned to Pakistan to meet demand,” he said, pointing to markets in Southeast Asia and the Americas.
In its annual economic survey released June 11, the Pakistani government reported that rice production reached about 10 million tonnes in the nine months to the end of March, up from 7.3 million tonnes in the same period last year.
Faizan Ghori, director of Matco Foods Ltd, Pakistan’s largest basmati rice exporter, said the 2022-23 harvest was particularly low because of devastating floods in the summer of 2022. But even compared to pre-flood years, current export growth “is about 20 percent, which is still very impressive,” he said, attributing the increase to India’s export ban.
For Pakistan, the unexpected recovery in revenue and production has provided a much-needed source of foreign currency for a country of 240 million people struggling with double-digit inflation, sluggish economic growth and soaring public debt.
Global rice prices have soared to a decade high since the Indian government imposed export restrictions in July, with poorer African countries that import large amounts of rice from India particularly affected.
“Rice prices are still high and are expected to remain high until India lifts the embargo,” said Joseph Glauber, a senior research fellow at the International Food Policy Research Institute, a food security think tank.
John said despite the export ban, India continues to be the world’s largest supplier of rice, followed by Thailand, Vietnam and Pakistan, although Pakistan’s market share has increased to about 10 percent from 7 percent a year ago.
Hamad Ateek, director of sales and marketing at Lahore-based Latif Rice Mills, said his company has seen a surge in demand and orders from regions where Indian rice dominates, such as the Middle East, Africa and Southeast Asia. These buyers “have had to buy from Pakistan at rates that are much higher than in India,” he added, referring to price hikes due to India’s export restrictions.
“[Exports] “The damage could have been even higher if shipping lanes had not been disrupted by the current Red Sea crisis,” Ghori said, referring to attacks on merchant ships since November last year.
The attack reduced demand for Pakistani rice from buyers in the Middle East, Europe and the United States, according to a government economic survey.
Analysts say Pakistan is expected to have another bumper harvest this year, but its farmers could face lower prices if India ends or significantly eases its export policies.
“The market is expecting India to ease restrictions after the election. Let’s wait and see,” Glauber said, referring to the six-week-old election that returned Prime Minister Narendra Modi to power.
