As per sources the members of the Rice Exporters Association of Pakistan (REAP) have urged the government to speed up the rice-energy barter trade with Iran in order to enhance the rice exports and to save the deteriorating rice sector in the country.
According to a REAP official, it has been stated that Pakistan had proposed to export rice to Iran in exchange for dues payable for imported electricity. A Pakistani delegation who visited Iran has finalized a deal to continue purchasing 74 megawatts of energy from the Iranian company Tavanir. Further, it was told that in case if the Pakistan and Iranian governments agree, the exporters will soon export one million tons of basmati rice.
At present, the Pakistan’s rice sector is struggling with increasing stocks and declining in demand and falling prices. The country has about 4 million tons of surplus rice, of which 3.2 million tons are non-basmati and about 700,000 tons are . On this issue, it has been reiterated that Pakistan owes about $100 million to Iran for electricity import and a faster deal in this regard would be a beneficial to both the countries. Meanwhile, Iran’s Ministry of National Food Security and Research confirmed that the government is working on the proposal.
It has been reported that Iran is one of the largest importers of rice accounting for about 11% of the world’s annual rice imports. Prior to sanctions by the western countries, Pakistan used to export around 700,000 tons of rice to Iran annually. Rice exporters welcomed Iran’s decision to lift sanctions on Pakistan rice from October. However, the exporters narrated that in order to have smooth export procedures with Iran, a proper currency transfer system is necessary. Since the Pakistan’s trade is routed through the Bank of New York (BNY, thus due to sanctions, the U.S. suspended the trade route through the BNY.
According to the data, the Pakistan exported around 155,570 tons of rice (including basmati and non-basmati) in the first month of FY 2015-16 (July – June), which is down about 14% from around 181,398 tons exported during the same period in FY 2014-15. The country exported around 3.93 million tons of rice in FY 2014-15 (July-June), up about 6% from around 3.72 million tons exported in FY 2013-14.