KARACHI: Pakistan’s rice exporters managed to increase their market share in the Middle East by about 59 percent in April 2020 as India went into a strict lockdown due to the coronavirus pandemic, said businessmen affiliated with the trade on Thursday.
The development has taken place at a time when the country’s other exports have significantly declined owing to the COVID-19 situation.
“The Middle East is the main market of India’s basmati rice,” Muhammad Raza, senior vice chairman of the Rice Exporters’ Association of Pakistan (REAP), told Arab News. “When New Delhi decided to impose the lockdown, the orders were diverted to Pakistan.”
Pakistan also went into a state of lockdown on March 23, witnessing a massive decline of 47 percent in its exports in April to $957 million. According to the Pakistan Bureau of Statistics (PBS), the country’s exports dropped by 54 percent against $2.9 billion recorded during July-April 2019-20 on a year-on-year basis.
As a result, the country’s trade deficit shot up by 42 percent from $1.5 billion in March 2020 to $2.1 billion in April 2020, though it still remained 19 percent down when compared with $2.6 billion recorded in April 2019.
According to provisional data, the country's rice exports to the Middle East increased by 59 percent to $420 million in April 2020 mainly due to the increasing demand of long grain rice in the United Arab Emirates, Saudi Arabia, Qatar, Bahrain and other regional countries. The export of basmati rice increased by 33 percent and overall rice exports surged by seven percent during July-March 2019-20 period, according to the PBS.
“The Middle East market was good for the country,” said the REAP vice president, “but the Indian lockdown also benefited Pakistan in the European and African markets.”
Commodity experts say the demand for Pakistani rice in the Middle East and other countries owed to the measures taken by other governments to maintain sufficient food stocks to ensure uninterrupted supply of these necessary items during lockdowns and quarantines.
“There is a huge demand for parboiled (sella) rice in Saudi Arabia, while white rice is a much sought after commodity in the UAE,” Muzamil R. Chapal, chairman of the Cereal Association of Pakistan, told Arab News.
Pakistan is among the top 10 rice producing countries in the world. The production of rice is expected to remain stagnant at 7.2 million tons in the current fiscal year (FY20), according to the State Bank of Pakistan.
“The country has more than 3.3 million tons of exportable surplus and there is no shortage of grain in Pakistan,” he said, adding: “The country can further consolidate its share in international markets by removing hurdles such as high shipping charges.”
Exporters said they could have exported more rice but could not go beyond the shipped volume due to labor shortage. However, the pace of export could decelerate due to the ease in lockdown restrictions in India.
“May 2020 will be a little subdued because India has eased lockdown and brought down its prices. Obviously, a country that shut down for more than one and half months will offload its stocks at lower prices,” Raza observed.