KARACHI, April 14: Pakistani exporters have failed to fetch better price for all varieties of rice in the world market where the Indians managed to get much higher price for similar quality.

There are about 100 rice exporters in the country of which 75 per cent are small and medium ones and the remaining 25 per cent own large export houses, which handle around 75 per cent of total rice exports.

However, large exporters having access to bank finances at lower mark-up rates have been instrumental in making domestic rice market highly volatile. Besides, funds from other sectors are also making their way into the commodity trade as a new generation of traders have emerged who ruthlessly chase every essential commodity to make big profits in a short period, market sources said.Textile industry facing most difficult time of its history is diverting funds to commodity trade in a big way to make quick and easy profits and this had been pushing prices of almost all essential commodities, including rice to record level, the sources said.

But the availability of funds at lower mark-up under the State Bank’s export refinance scheme for rice export had been main cause of flare-up in rice prices, market sources said. Nevertheless, this did not help the country to get better or higher price for the produce in the world market.

As a result of these cheaper funds, exporters preferred to sell rice at a much lesser price than offered by their competitors in the world market. This helps them to avail more funds at cheaper rate on showing better and higher performance, which is a condition for getting more cheap funds under the export refinance.

Therefore, the market sources said that the cheap bank finance at this juncture was only encouraging hoarding and pushing up prices not only on weekly or monthly but on hourly basis in the domestic market, which had become out of common man’s reach.

According to a report released by Quality Review Committee (QRC) inspection cell for shipments from July 2, 2007 to April 5, 2008, Pakistani basmati rice fetched average price of $736 per ton, while its domestic price stood at Rs55,000 per ton, excluding export packing and processing cost of Rs8,000 per ton.

Similarly, super basmati Sela (parboiled) rice could only fetch $721 per ton against its local price of Rs70,000 per ton. Therefore, average export price of super basmati stood at $885 per ton against its average local price of Rs75,000 per ton. However, when these export prices are compared with India, which is the only competitor in basmati rice, there is a huge difference in price they are getting in the world market. Indian variety Pusa-1121 Sela (parboiled) is currently fetching $1,650 per ton and traditional premium basmati rice $1,900 to $2,000 per ton. The average unit price of the Indian basmati rice stood at $1,450 per ton as on March 31, 2008.

The market sources said that our exporters were also not getting good price for Irri-6 rice and on an average $475 per ton had been fetched so far. Thailand exporters got average price of $830 and $1,130 per ton for its fragrance rice. India, Egypt and Myanmar imposed a ban on export of non-basmati rice to meet their domestic needs.

In the current volatile market all varieties of rice have shown steep increase but the Indian rice exporters took full advantage of the situation and managed to fetch premium price in the world market for each and every variety of rice.

It is interesting to note that the Indian rice exporters are not being supported by any kind of rebate or subsidy and for that matter even cheap bank funds yet they managed to fetch better price for their commodity in the world rice market.

The cheaper bank finance was initially allowed by the State Bank when the government allowed rice export in the private sector in early 80’s on winding up of the RECP.However, rice traders say that now the situation has totally changed and world rice market is no more buyers’ market but have suddenly changed into sellers’ market where no support from the government is needed.