ISLAMABAD—Soon after the announcement of 636 negative items while replacing the already existing positive list for trade with India, Pakistan for the first time in history started importing rice from the neighbouring country.
Pakistani buyers have placed the first import order for at least 2,500 tonnes rice, while almost 100 tonnes have reached the markets in Punjab.
It’s expected that the traders would further place orders for imports as the commodity in Indian market was available at cheaper rates than Vietnam, Thailand and other countries.
“This was a major development in the history as the Indian commodity was coming to Pakistan, despite having a huge stock in the country,” said CEO Harvest Tradings, Ahmad Jawad in a statement here on Monday. He said the reason behind the import of rice despite having huge local stock was the major difference in price of the commodity as India had reduced the bench mark price of rice drastically.
“Though the development would badly hit the role of middle man interims of profit, the imports of cheaper rice especially basmati from outside the border would make competition in the country in terms of price and may benefit the retail customers” Jawad remarked.
He, however was of the view that Pakistani basmati rice would retain its importance in the domestic market owing to its special taste. As both countries are members of the South Asia Free Trade Area (SAFTA) established in January 2006, trade between the two countries is unnaturally small and the scope for gains from increased trade is correspondingly large. The Indian rice has also diversified qualities, like original basmati, duplicate basmati and others available at comparatively cheaper rates.
It is worth mentioning here that despite the bumper crop in the country this year, the record decline in export price of non- basmati rice from India was already creating tough competition for the country’s products in the international markets.
The CEO Harvest Tradings further told that the Indian government had reduced the minimum export price of non-basmati rice after exports failed to pick up.
The government had allowed limited exports of non-basmati rice after a bumper crop in 2010-11. Earlier, India had banned exports of rice, except the costlier basmati variety, to beef up supplies in the domestic market and cool down soaring prices in April 2008.
Presently, the increased domestic production and lower export of basmati, last year had resulted in abundant availability in the Indian domestic market. These factors brought down prices of this elite variety, but Pakistan rice will retain its importance in the domestic markets owing to its special taste; Jawad said.