Pakistan’s rice exports have made a fresh record this fiscal, reaching 4.5 million metric tons (MMT) during 11M-FY22. As per PBS, rice exports for fiscal year to date are up 33 percent over same period last year, despite a weak performance during May-22. With one more month to go, will exporters be able to cross the psychological barrier of 5MMT?

The strong performance during the ongoing fiscal has primarily come on the back of coarse rice exports, which are anticipated to cross 4MMT by June end (up 35 percent over the previous year).

Pakistan’s previous coarse rice record stands at 3.75MMT for FY16, against export earnings of a little over $1.4 billion. Coarse rice earnings during 11M have already added $1.65 billion to export kitty, with forecast to safely reach $1.8 billion by year end.

Meanwhile, basmati exports during the year have failed to inspire even though exported volume during 11MFY22 is also up 23 percent over the previous year. Full year volume forecast of 0.75MMT will hardly feature among top-10 basmati export years, which averaged at 0.95MMT between FY03 – FY12. Similarly, basmati export earnings may remain shy of $0.7 billion by fiscal close.

If the trend continues as projected, basmati volume and value will be less than levels touched as recent as in FY20, the pandemic year.

This isdespite a hundred dollar per ton rise in basmati prices in the export market during May-22, which have also sent local prices in a frenzy. Super basmati (new) prices in local wholesale markets have risen by at least 20 percent in the last 45 days alone. It is unclear whether export demand has strengthened during June-22, or local prices have risen in response to news of lower basmati cultivation due to canal water shortage.

Either way, full year export earnings (for all varieties) will most certainly manage to bag $2.5 billion, of which as much as three-fourths supplied by coarse rice exports (coarse rice share in export volume stands at 85 percent).

Increasingly, Pakistan is establishing itself as a small but significant player in coarse rice exports (including hybrid rice), with its share in basmati export market diminishing to a little under 15 percent. On the other hand, local demand for basmati remains unsatiated, as over 80 percent of local production now goes towards domestic consumption. With Pakistan fast running out of irrigated acres to cultivate rice – while basmati prices in international market are tracking up along with a freefall in rupee value - a basmati price spiral in local market may soon become a distinct possibility.