Govt urged to stop TCP from meddling in rice exports

KARACHI: Exporters have opposed intervention in rice export trade from the state-owned Trading Corporation of Pakistan (TCP) and accused it of disturbing market mechanism thereby depressing prices of basmati rice in the world market.
 
The TCP floated export tender for 25,000 tons of super basmati rice on Dec 18, 2009 for the disposal of rice procured by the corporation last year, which is presently stocked at Pipri godowns, near Karachi.


The corporation earlier also made an attempt to sell the same quantity of super basmati rice by floating international tender but did not get any response from local exporters and world traders till its last closing date Nov 24, 2009.

At a time when rice export was solely handled by the defunct state-owned rice export corporation RECP) the average price of basmati rice in the world market was $300 per ton.

However, when the private sector was allowed to handle rice exports, the prices increased up to $1,250 per ton and growth in export was so remarkable that rice became the second highest earner of foreign exchange by fetching over $2 billion, a leading rice exporter Shamsul Islam Khan said.

On getting a better price for their produce paddy growers did not only increase the production but also tried to meet quality and standard sought by exporters. For achieving these targets the private sector exporters made huge investments in rice processing industry by installing state-of-the-art imported machinery to improve quality of rice, he added.

“We are perturbed at the TCP’s role in rice export business because due to their intervention prices have started falling down and ultimately this is going to hurt paddy growers, who will get less price for their produce,” another exporter Jawed Ghori said.

Ever since paddy growers began to get better and higher price for their produce the production also increased as a result exports also rose substantially to historic high of 4.2 million tons, which made Pakistan the third largest exporter of rice in the world, he maintained.

However, he said the TCP intervention had reduced export quantity to mere 2.9 million tons as on June 30, 2009 and alleged that procurement of rice by state-owned corporation have re-introduced malpractice and large scale adulteration of inferior varieties resulting in piling up of huge stocks of around 1.2 million tons in the country.

Instead of exporting rice held by the TCP the government should use these as buffer stocks and sell it through Utility Stores Corporation of Pakistan and CSD etc and this way it will also ensure lesser loss to the national exchequer, Mr Shams suggested.

After the debut of private sector in export business the dynamics changed and presently, buyers demand rice mostly in small packing, which is directly put on shelves for sale and the concept of bulk rice sale, except by public sector, no more exists, he added.

He reminded policymakers that the rice export is the only sector, which grew and benefited the country without any government support or incentives. Mr Shams appealed to Prime Minister Yousuf Raza Gilani to intervene and refrain the TCP from meddling into rice export trade because this will not only damage exports but also render millions of people jobless, who are directly and indirectly connected with rice trade.