The 13 percent YoY increase in exports for 10MFY18 was led in part by food exports, of which rice accounted for 40 percent. Nearly 80 percent of Pakistan’s rice exports are of non-Basmati rice. On average Basmati rice is over a $1,000 per ton as compared to less $500 per ton for non-Basmati rice, as per PBS data. That is a differential of nearly 150 percent which is why the premium-priced Basmati gets the spotlight a lot more than its brethren.
Basmati rice, similar to non-Basmati rice, has different varieties. As per REAP export data, there were mainly 6 different varieties of non-Basmati rice exported in FY15 and 4 different varieties of Basmati rice. The least expensive variety of Basmati – Basmati brown rice – was nearly 40 percent more expensive that the most expensive non-Basmati variety i.e. blended rice.
Globally the Basmati market (including raw, parboiled, and steamed) stood at $10.5 billion in 2017 and is growing at a CAGR of over 10 percent to reach $17.8 billion by 2023. EU, one of Pakistan’s main markets for Basmati rice, is growing at a CAGR of 3.2 percent and is expected to reach $615 million by 2023.
The non-Basmati rice has many exporting countries with players from ASEAN taking the lead. Basmati rice on the other hand is famed from originating from the sub-continent making India Pakistan’s main competitor. Here, Pakistan has an advantage as EU has banned Indian rice for having high level content of a fungicide called Tricyclazole. (Read “India’s loss – Pakistan’s gain”, published on June 6, 2018 for more information). While this restriction is in place for EU alone at the moment, Jordan earlier, this year, denied permission for off loading containers carrying Indian Basmati for similar reasons.
Thus it is possible that it is a challenge that India will continue to face, especially if other countries jump on this band wagon. Since it will take a minimum of three harvests to bring down Tricyclazole content to permissible level, Pakistan has time to elbow in and increase market share.
It has been said innumerable times that Pakistan’s exports are non-diversified and dependent on resource goods. This is a state of affairs that is not possible to address in the short and medium term. If Pakistan has to depend on agri goods in the foreseeable future, why not ensure that they are at least premium priced such as Basmati rice?
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