Global Rice Prices Reach 15 Year Peak

The global rice market is currently in turmoil, facing a confluence of challenges from climate change, El Nino, and restrictive export policies—especially notable are India’s limitations on non-basmati rice exports. This combination has propelled global rice prices to a 15-year peak. Consequently, individuals in nations like Thailand and Vietnam are stockpiling rice, apprehensive of further price surges. Vietnam’s agriculture is grappling with the impacts of climate change, leading some farmers to transition from rice to alternative crops such as mangoes, indicating a potential long-term decline in rice production. Myanmar has recently joined the ranks of countries curbing rice exports, and there are expectations that India, a key player in the global rice market, will tighten its export restrictions even more next year. These developments paint a bleak picture for rice availability in 2024. The situation is further compounded by China reducing water flow in the Mekong River due to decreased rainfall from El Nino, affecting regions that produce rice.

On a more positive note, some countries are better positioned to weather this crisis. Japan is decreasing its rice consumption, and both China and Indonesia have established rice reserves in response to shortages during the COVID-19 pandemic. India has also reduced the minimum price for basmati rice exports with the goal of enhancing its global market share. However, these measures may not be sufficient to alleviate growing concerns among Asian governments and experts, given the deepening economic challenges coupled with climate-related issues. The path to stabilizing the global rice trade may hinge on the relaxation of export restrictions, particularly in India.

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Pakistan rice exports to increase in fiscal year 2023

In a recent press conference, Chela Ram Kewlani, the Chairman of the Rice Exporters Association of Pakistan (REAP), shared some significant developments in Pakistan’s rice export industry. He announced that Pakistan had achieved $2.5 billion in rice exports during the fiscal year 2023 and was poised to set a new export record in the current year.

Kewlani also noted a growing demand for Pakistani rice from Indonesia, with a substantial export of 90,000 metric tons recently completed.

Kewlani highlighted that Pakistan’s anticipation of a bountiful rice crop had paved the way for abundant rice stocks available for export. Moreover, the global demand for Pakistani rice had surged due to India’s imposition of a ban on rice exports.

Addressing concerns about the Minimum Export Price (MEP), Kewlani acknowledged that during his tenure as Chairman of REAP, the MEP had faced delays for unspecified reasons. However, after a one-year hiatus, the MEP was now being properly established, set at $551 for Irri-6 and $1103 for super basmati rice. Kewlani assured stakeholders that the MEP would be determined following established procedures to ensure fair rice exports.

To foster the development of new rice varieties and enhance per-acre yields, Kewlani announced the establishment of an R&D department and a library under REAP’s umbrella.

He pointed out that while Pakistan was still using Irri-6 seed, the Philippines had introduced a superior variety, Irri-257.

In addition to this, Pakistani rice exporters had been actively seeking out new export markets, and their efforts had borne fruit with two countries recently lifting bans on Pakistani rice exports. Kewlani commended the collaborative efforts of REAP, the Ministry of Commerce, and the Department of Plant Protection, which had resulted in Mexico and Russia reopening their markets to Pakistani rice after a prolonged hiatus. This development was expected to boost foreign exchange earnings significantly.

To manage commodity prices and supplies effectively, Kewlani recommended that the federal government establish a policy board representing all stakeholders. Such a board could monitor commodity demand and supply, especially for essential items like sugar and wheat.

During the press conference, former Chairman Rafique Suleman praised Mexico and Russia as promising export markets for Pakistan, offering premium prices for rice. He highlighted that these countries had even purchased Pakistani rice at $850 per metric ton, contributing to the goal of achieving $3 billion in rice exports for the fiscal year.

Suleman reiterated that REAP had presented a $5 billion rice export roadmap to the federal government four years ago, but it had yet to be implemented. He emphasized that if the government adopted REAP’s proposal, Pakistan could potentially earn over $5 billion through rice exports.

He underscored that despite intense competition in the global market and higher operational costs within the country, rice exporters were generating billions of dollars without relying on government subsidies.

Suleman urged both the government and the State Bank of Pakistan to continue supporting exporters through export refinance schemes. He noted that after India’s ban on rice exports, global rice prices had risen by $100 per ton, presenting numerous export opportunities for Pakistani traders.

Mahmood Moulvi, a former Chairman of REAP, recalled his initiative to establish MEP regulations during his tenure to ensure fair rice exports. He emphasized that the current MEP aligned with international market trends and should be adhered to accordingly.

The press conference also featured the presence of other notable figures from the Managing Committee, including Anwar Main Noor, Muzammil Chappal, Muhammad Raza, former Chairman REAP Abdul Rahim Jano, and others.

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