RICE contributes 9pc to the national export proceed and 3.1pc to the agriculture GDP of Pakistan.

During the last decade, the composition of rice exports has changed drastically. Basmati’s share in rice exports has declined from 58pc in 2007-08 to 24pc in 2015-16. In value terms, the basmati exports have declined from $1.1bn to $447m whereas that of non-basmati varieties has nearly doubled from $767m to $1.4bn.

Though this transformation appears inconsequential as the net export proceeds remain similar, it’s indeed regressive as Pakistan is being knocked out of the premium quality rice segment and improving competitiveness in the coarse rice market characterised by a price race to the bottom.

The main reason for the unending slide in Pakistan’s basmati exports is the gradual erosion of competitiveness and the failure to adapt the product with the evolving international market dynamics in a zero-sum competition with the only other basmati producing country india.

During the last 20 years, India has seized the basmati market from Pakistan owing to its lead in the development of basmati varieties and improvement in processing technologies especially parboiling.

Since 1995, India has developed more than 20 high-yielding, disease-resistant and extra-long varieties of basmati, its hybrids and look-alikes, whereas in Pakistan no successful indigenous high-yielding basmati variety has been fielded since the approval of Super Basmati in 1990s.

Conversely, the Basmati-385 variety has commercially petered out due to unviable low yields and shorter grain length; Super Basmati has degenerated in natural varietal life-cycle.

Around 46pc of the global basmati consumption, outside the subcontinent, is in Saudi Arabia and Iran only. In the Saudi market of $1.4bn, Pakistan has gradually lost its share to India from 59pc in 1986 to a meagre 6pc in 2015 whereas in Iranian market of $1.2bn Pakistan’s share is a dismal 0.4pc now

The two recent Indian-developed varieties 1121 and 1509 have nearly taken over the increasingly parboiled-preferring global basmati market. Both the varieties have average grain length (AGL) of 8.1-8.4mm and a per acre paddy yield of 2.0-2.4 tonnes compared with 7.0 to 7.4mm AGL and 1.2 to 1.7 tonnes yield of Super Basmati. The superior aroma of Super Basmati becomes irrelevant for the parboiled/sela rice as the aromatic compounds evaporate in the parboiling process.

While Pakistan has been trying to preserve its natural heritage of basmati at international forums and through promulgation of legislation on geographical indications, the commercial extinction of indigenous basmati varieties would render such protection meaningless.

On the processing side, India has secured a technological advantage by developing mechanised parboiling technology which ensures color consistency and absence of odour which sets in through manual parboiling techniques. The development of 1121 and 1509 varieties ideally complemented the parboiling technology.

The market side developments have also accentuated Pakistan’s struggle in the world market.

The global basmati market size has phenomenally grown from 2m metric tonnes (MMT) in 2005 to 4.7MMT in 2016, whereas Pakistan’s share has declined from 42pc to 11pc during the same period in all the major basmati importing countries.

Around 46pc of the global basmati consumption, outside the sub-continent, is in Saudi Arabia and Iran only. In Saudi market of $1.4bn, Pakistan has gradually lost its share to India from 59pc in 1986 to a meagre 6pc in 2015 whereas in Iranian market of $1.2bn Pakistan’s share is a dismal 0.4pc now.

Though the loss of share in Iranian market can be partly attributed to economic sanctions, the near elimination of Pakistan from the Saudi market is owing to loss of competitiveness, failure to adapt the product offerings and poor marketing.

The EU’s duty-free regime of brown basmati imports makes the EU a unique market for basmati but Pakistani basmati has been generally faring well here.

Poor marketing techniques and poorer business ethos have also contributed to the erosion of Pakistan’s market share. In 1999, Rice Exporters Association of Pakistan with the support of the Export Promotion Bureau had set an unprecedented model of voluntarily creating a Quality Review Committee (QRC) for mandatory inspection of basmati rice to ensure quality standards and checking the mislabelling of blended rice as basmati.

The blended rice exporters, after around 15 years of consistent effort to undo the QRC, were finally able to get it disbanded in 2015, further eroding the quality perception of Pakistani basmati in the import markets.

To conclude, Pakistan is steadily regressing in a progressing global basmati market due to loss of competitiveness ensuing from productivity crisis, innovation deficit in varietal development and processing technologies, lack of product adaptation, and poor marketing techniques and ethos.

The strategy to regain the market share in premium rice segment entails: immediate focus on agronomic research of high-yield, short-period, long-grain, drought-and-disease-resistant basmati varieties; proliferation of processing technologies; re-introduction of mandatory pre-shipment inspection mechanism for improving quality perception of Pakistani basmati; promotion of

branding and development of short-term penetration strategy for the post-sanctions Iranian market.

The writer is a joint secretary (Exim), Ministry of Commerce.

Published in Dawn, Business & Finance weekly, January 2nd, 2017, 2016