According to the Government sources, it has been reported that Pakistan has finalized recently an agreement with Indonesia to export one million metric ton of rice, estimated at around $400 million over four years. The agreement for export of rice will be implemented by Trading Corporation of Pakistan (TCP) and Indonesian government organization BULOG (State Logistic Agency), as stated by the Commerce Ministry. The TCP has finalized the first tender of 15,000 metric tons of rice export to Indonesia, which includes 5,000 metric tons of basmati rice and 10,000 metric tons of non-basmati rice.
Further, it has been revealed that the finalization of this tender has a positive effect on the rice prices in Pakistan and the prices have started to stabilize. In this aspect, the Commerce Minister Mr Khurram Dastgir Khan informed that the export order of one million metric ton would end the uncertainty prevailing in the domestic rice market and lucrative prices would prove to be an impetus for growers to expand rice production in the coming years. It was also told that the Commerce Ministry in collaboration with the Ministry of National Food Security and Research will bring in new legislation for high yielding varieties of rice and law for Geographical Indication for Pakistani basmati rice.
It was underlined that Pakistan was the first country out of the Association of South East Asian Nations (ASEAN) to have rice export agreement with Indonesia. Pak-Indonesia trade rose 215 percent to 2.2 billion in 2014 from 700 million in 2010 after the conclusion of Preferential Trade Agreement. Earlier Indonesian government told that it is mulling to import rice from Pakistan amid low rice stocks following a prolonged dry season. Further, the Indonesian Trade Minister Mr Thomas Lembong said his government was preparing a government-to-government Memorandum of Understanding (MoU) on rice imports with the Pakistani government. The Indonesian rice planting season had been put back from October to November because of last year’s prolonged El Nino. As a result, harvest time in several areas across Indonesia suffered delays, leading to depleted rice stocks in the first quarter of 2016.
Now, the government therefore calculated that it has only 1.35 million tons of rice in March. Normally, the government has 1.5 million tons of stocks. To fulfill the shortage of rice, the government was keen to sign import MoUs with Myanmar and Pakistan. As narrated by the Indonesian officials that agreements were a precaution measure to anticipate reduced rice stocks, which could in turn lead to surging prices of basic commodities. The estimated domestic production of rice at the end of March this year will be around 1.35 million tons in the Southeast Asian country.