Pakistani rice is in high demand in international market. Overseas rice sales surged by more than a quarter to 2.5 million tons during Jul-Jan FY10, year-on-year, and industry sources expect their exports will likely cross 4.5 million tons this year, up 60 percent over last year.
This growth forecast is based on a) a bumper crop of 7 million tons at home, and b) continuous demand from international buyers. The gap between the global production and consumption is seen widening by 4 percent, partly due to falling output and partly due to rising consumption.
Guided by these dynamics, India - the worlds largest rice exporter - has imposed an export ban on their non-basmati variety of the product this year, while allowing the sales of premium quality basmati rice.
Consequently, according to the central banks assessment made earlier this year, India is likely to become a net importer of rice this year putting upward pressure on prices of the grain. Industry voices are of the same opinion - citing lower output estimates for Brazil, Indonesia, Uzbekistan, and Panama.
"Excessive rains in southern Brazil during planting have reduced planted area and expected yields. Additionally, dryness in central and eastern regions of Java, Indonesia, has slashed production prospects," says one rice dealer.
This is good news for Pakistani rice farmers and traders who can earn good price during the next six to eight months. Behind this sanguine picture, however, lie two factors that require forward planning today.
Most traders and agriculturists are of the view that May 2010 would be a testing time for rice crop in terms of water availability. Reportedly, a significant acreage of cultivated land is already under water scarcity - raising concerns over crop prospects for the next fiscal year, whose fate would be determined by summer rains.
Second, since the price of rice, cotton and sugar is seen attractive given their low production and high consumption forecast around the globe, there are fears that farmers will ignore wheat in favour of these lucrative crops.
This can create panic at home, because if wheat output falls short, it would not only affect the price of bread but also impact that of meat, eggs and dairy, owing to a consequent rise in the price of fodder.
Perhaps, a plan to dissuade crop substitution should be on cards.
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