Rice export saved by volumetric growth

Its amazing how rapidly luck swings and alters the outcome. In a year which could have been one of most the lucrative years for rice exporters, the outlook of higher-than-expected rice crop has suddenly dampened their dreams.
Domestic rice exporters were poised to increase their export revenues this year on the back of bumper production at home amid higher prices in international market. However, massive fall in world rice prices, owing to prospects of higher supply, has capped their revenues.
Despite a 71 percent increase in the quantity of exports, rice exporters managed to increase their sales by just 6.3 percent.
Subsequently, revenue receipts from major exports destination U.A.E, Iran and Afghanistan, decreased considerably during first five months of current fiscal year, according to TDAP data. In terms of quantity, export managed to increase in relatively smaller markets, like Kenya, Yemen and Somalia.
The main culprit for price decline is relatively better weather in Asia, as major rice producing countries, including India are expected to recover from drought this year.
Consequently, the FAO All Rice Price Index, which is based on rice export quotation from 16 countries, plunged to 206 points in April from 271 points in April last year.
Prices are likely to remain under pressure in the coming months, according to FAO, as world rice paddy production is expected to increase by 4 percent in 2010 to a record 710 million metric tons. In contrast, global rice consumption is seen growing by a minimal 2 percent to 454 million tons.
On top of that, rice production in Pakistan will likely fall in 2010, according to Business Monitor Intelligence, a UK-based research organization. This is because of irrigation water constraints and a large fall in planted area after disappointing prices for the 2009 crop.
It is high time that Minfal acts pronto towards building infrastructure as unreliable irrigation system has left the crops at the mercy of weather.

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RICE EXPORTS

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                   Jul-Mar 10   Jul-Mar 09    % chg

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Amount $(bn)            1.619        1.523     6.3%

Quantity (tons)     3,276,280    1,911,641    71.4%

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Source: Ministry of Commerce

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