ISLAMABAD, April 30: The government on Wednesday announced a minimum export price (MEP) for all varieties of rice to protect domestic supplies and contain prices at the time of shortage.

The decision was taken during a meeting of rice exporters with Finance Minister Ishaq Dar. The meeting which began at 7pm on Tuesday, ended at 6am on Wednesday, Rice Exporters’ Association of Pakistan (REAP) chairman Mian Azhar told Dawn.

The commerce ministry has been opposing the fixing of minimum price on the grounds that it will result in losing the international market for rice.

According to a notification of the commerce ministry, the MEP for super basmati has been fixed at $1,500 fob per ton, basmati medium grade (385/D-98) at $1,300, Irri-6 at $750 and non-basmati at $100.

Mr Azhar said that an agreement had been reached with the government to build a strategic reserve of 300,000 tons of rice to meet any shortage in the country.

He said that exporters had agreed to provide 200,000 tons of rice at subsidised rates to utility stores for the next six months. The stores would sell basmati broken for Rs43 per kg and super basmati for Rs73, he added.

He said the MEP would provide maximum benefits to farmers and encourage growers to increase yield for the next crop.

Mr Azhar said the rice production was expected to increase to eight million tons in the next crop from the current crop of 5.5 million tons. “The increase in rice production will automatically raise the wheat output.”

He said that MEP rules would be notified to enable the commerce ministry to make changes in rates in accordance with market trends.

When asked why had the association pushed for the MEP, he said the open trade had resulted in revenue losses and lowered the price for Pakistani rice. He said that Indian exporters bought Pakistani rice in Dubai and sold it in the international market after New Delhi imposed a ban on export of all varieties of rice.

He said with the introduction of MEP, the value of rice exports would rise to $4 billion by the end of this year from $1.2 billion last year.

He said the MEP would also discourage the under-invoicing of rice exports.

Mr Azhar said that due to under-invoicing the government was losing Rs20,000 per ton on export of rice to Iran.

The government collects one per cent duty (withholding tax) on export of goods and commodities.

He said the government should launch a crackdown on hoarders and restrict refinance facility to the rice sector. The current demand for rice in the international market would provide an opportunity to Pakistani exporters to maximise their profits, he said.