Pak’s rice exports surge to record level after gaining access to Russian market

DM Monitoring

NEW YORK: With the resumption of rice exports to Russia, shipments of the grain from Pakistan are expected to surge to a record this year on bumper production in the country, according to Bloomberg, a New York-based international news agency.
“We have got access to the Russian market and our exports to that region will increase by as much as 200,000 tons,” Syed Waseem-ul-Hassan, food security commissioner at Pakistan’s national food ministry,” was quoted as saying in Bloomberg’s report.
“Total exports are expected to increase by 10% to 15% this year from 2020 as the government also aims to boost shipments to regions like Africa,” he told the agency in a phone interview.
Pakistan is the world’s No. 4 exporter of rice, which it exports to about 140 countries, Bloomberg pointed out. “A jump in exports, which are likely to climb as much as 15% from a year earlier to more than 6 million tons in 2021, will be good for Pakistan as Prime Minister Imran Khan’s government is trying to revive the fragile economy with the help of the International Monetary Fund, and aims to cut imports and boost overseas sales,” the report said.
Russia lifted its 2019 ban on purchases from Pakistan in early June after Islamabad strengthened its phytosanitary quality certification process for rice processing units, the agency said, citing the food ministry. The government also sees increased buying from other countries in the region, such as Ukraine, Tajikistan and Turkmenistan.
Malik Faisal Jahangir, senior vice chairman of the Rice Exporters Association of Pakistan, was quoted as saying that the resumption of rice exports to Russia is a milestone. Four members of the group have already complied with the Russian milling standards, and many more compliant units will be added this year, he said, noting that overseas sales are attractive due to the huge availability of rice.
Domestic production is estimated to surge 13.6% to an all-time high of 8.4 million tons in the year ended June, according to government data.
However, a rise in global supply could further pressure prices of the staple, a predominant source of nourishment for more than 3 billion people worldwide, the agency said. The Asian benchmark for Thai white rice has slumped 24% since a peak in February, while rice futures in Chicago have gained only 4% during the period. A weaker local currency has also helped shippers as Pakistani rice becomes relatively cheaper for overseas buyers. The rupee fell about 3.5% against the dollar in the April-June quarter, according to Bloomberg data. It may slide further by the end of September, with high commodity and oil prices weighing on sentiment, it said.
“A weaker rupee will benefit rice exports, which are already increasing,” said Ahsan Mehanti, chief executive officer at Arif Habib Commodities. “We see our competitors getting more impacted by Covid. This too would help Pakistan’s exports,” he said, adding that shipments of more than 6 million tons would be a record high.