Pakistani rice exports: A booming sector that needs government support

Pakistani rice is serving a purpose far greater than tasting good in Biryani: it’s turning into a lifeline for the country’s economy, bringing in nearly $4 billion annually.

In July and August alone, exporters managed to export a staggering 620,000 metric tons of rice. That’s a huge deal, especially considering they did it without enjoying government perks like minimum support prices or energy subsidies.

What’s even more impressive is how Pakistani rice is standing out globally. Compared to its counterpart India, Pakistan had 74 alerts, while India had a staggering 264 alerts. The result is that Pakistan is building a reputation for quality rice, especially in Europe.

And with production ramping up significantly in the past year, Pakistan has been able to beat India in price, too. As such, Pakistan now has a 25 per cent share of Europe’s rice market while India is behind with 17 per cent. However, India isn’t sitting quietly – they’ve come out firing by lifting bans on certain rice varieties to regain their market share.

Rice exports could be the key to pulling Pakistan out of its economic troubles. At the close of FY 2023, Pakistan’s current account deficit was a worrying $3.275 billion.

But the Minister of Commerce, Jam Kamal Khan’s new vision might change that.

He wants to boost rice exports by $3 billion, which could nearly wipe out the deficit and inject much-needed dollars into the economy. Moreover, the minister expressed interest in educating farmers to improve the quality of rice harvests to reduce the chances of getting flagged with a health alert by foreign authorities.

However, the catch is that to jump from $4 billion in exports to $7 billion, a 75% increase, Pakistan’s rice industry needs help. But what could be the solution here? The solution: Government subsidies to rice exporters.

While exporters are doing well, they could meet the minister of commerce’s goal with the right support. Access to state-of-the-art rice milling machines and government-improved irrigation systems is necessary. Rice is a water intensive crop, and any disruption in water supply wipes out a year’s worth of yields.

But even low-cost milling machines can cost small farmers around PKR 3 million – a price many can’t afford on their own.

If Jam Kamal wants to take rice exports to the next level, the government needs to step in. Supporting farmers and exporters with subsidies could be the difference between a negative and positive balance of trade in the coming years.

Is rice the new saviour of the economy? Time will tell.