"Although the belated effort through TCP would hardly benefit the growers at this point, but the slow and reluctant attitude of exporters throughout the last 3/4 months has depressed the domestic trade, which has invested in paddy purchases and awaits buyers," the association said in a letter written to Commerce Minister Amin Fahim.
The association, headed by Hamid Malhi, has also brought some interesting facts to the notice of the minister, who at present is with Prime Minister Yousaf Raza Gilani in Davos, attending the World Economic Forum.
According to the letter, (i) growers have increased rice production from 3.2 million tons in 2000 to 6.5 million tons this year; (ii) there are more than 11060 rice mills in the country, of which only 500 are exporters (Reap members), while the number of exporters exporting above 1000 tons is only 90; (iii) ironically, Basmati exports were quoted at an average rate of $780 per ton before imposition of $1500 minimum export price (MEP) in May 2008, after which the avenge rates jumped to above $1500 per ton.
The growers are of the view that rice exports were stagnant at $1.1 billion during July-December 2008 as compared to the same period a year before. This was against expectations as, in 2008-09 MEP was enforced during July and August 2008. The growers' opposition to removal of MEP was ignored whereas India, the only rival in Basmati exporter, was forced to review its policy because of low quotes by Pakistan's exporters.
In January, 2009, India reduced MEP for Basmati from $1330 to $1100 but did not remove it altogether. Unfortunately, the advantage was not fully exploited by Pakistan's private sector during this period.
The association has further stated that in the first half of the current fiscal year around 190 exporters sold above 1000 tons each, while some 662 rice exporters sold below this quantity, and some of them exported only 20 tons (one container) each.
"Rice exporters are in full knowledge of the increased rice production prospects and remained closely involved in all decision making in this regard at the federal and provincial levels but unfortunately they remained focused on their personal profits and took a complete U-turn when they could not achieve this objective and have, therefore, resorted to opposing TCP and Passco's intervention," sources quoted Malhi as saying.
The association, however, is also of the view that rates in the first TCP tender were higher but the later tenders are at prevailing market rates. "The projected Rs 30 billion loss to the government is unimaginable unless all rice purchased by Passco and TCP is dumped into the sea," Malhi said.
He urged the Commerce Minister that the propaganda campaign launched against the policy of rice purchase through TCP and Passco to mop up this year's surplus production should not deter the government from continuing with the policy.