Rice exports from Pakistan are set to reach more than 4 million tons by the end of the current fiscal year, thanks to improved domestic production and higher demand from Asian and African economies.
Being one of the largest rice exporting countries, Pakistan sold around 3.6 million tons of rice during the past ten months ending April as against 2.2 million tons in the same period last year. But, as global prices continued on its downward journey, exporters fetched $1.8 billion, merely 7 percent higher than last year.
The main cause of price decline was relatively better weather in Asia and ample availability from supplying countries. Therefore, the FAO All Rice Price Index, which is based on rice export quotations from 16 countries, plunged to 201 points in May down from 251 points in January.
Despite depressed prices, FAO alleged that rice still remains expensive in international markets compared to other cereals, wheat in particular. Rice-to-wheat price ratio is till hovering around 2.5, well above the average of 1.6~1.8.
Global rice paddy production is forecast to grow by 3.6 percent to a record 707 million tonnes in 2010. At the same time some 640 million tonnes are expected to be harvested in Asia, thats 23 million tonnes more than 2009. Given that production scenario, prices are expected to remain under pressure.
The decision taken by the Kenyan government to lower import duty on rice, might be a blow to Pakistani rice exporters - as countries like Vietnam, China and Iran are eying a bigger share.
"We of course expect some shift in Pakistans rice export profile to Kenya because the market has now become leveled for all to compete", a senior official at the Trade ministry in Nairobi told international media.
The impact on rice export from Pakistan would be negligible as rice importing countries on Pakistan portfolio are widely scattered.