KARACHI, Jan 21: The Union of Small Enterprises (Unisame) has urged the Securities and Exchange Commission of Pakistan (SECP) not to allow future trading of rice till such time the rice market stabilises.

Unisame President Zulfikar Thaver has invited the attention of the SECP towards the global practice of allowing future trading in commodities. He said only those countries have future trading in commodities which have huge surplus after meeting the domestic demand.

He further said that in Pakistan commodities were always victim of some problem or the other. When there is a bumper crop it is smuggled to neighbouring countries and when there is a shortage huge quantities are imported.

Under such circumstances future trade in rice or any other produce was not possible, he added.

The Unisame chief drew the attention of the SECP towards the current shortage of rice created by speculative trading by those investors, who have obtained huge export refinance and the cartel of the middlemen operating in the market.

Pakistan is surrounded by food deficit countries which always promotes cross border smuggling adversely affecting domestic market and the recent wheat and the wheat flour crisis is a living example where a country after producing over 22 million tons wheat has to face acute scarcity of wheat flour.

He apprehended that if a future trading in essential commodities like rice was allowed by the National Commodity Exchange Ltd (NCEL) it would escalate prices to an unbearable level. Currently, there are strong indications that the government might temporarily impose export duty, fix minimum export price or ban rice export till March when the new wheat crop arrives to overcome the food grain shortage.

He said that the commodity exchanges worked best in countries where commodities demand and supply was based on its own merits and demerits and not in countries which were feeding their neighbours through smuggling because their markets did not reflect the true picture of the country’s commodity position.