Source: Bloomberg

By Thomas Kutty Abraham
Pakistan, the world’s fifth-biggest rice exporter, may ship 15 percent less of the grain this year after a power shortage affected milling of paddy, adding to a global shortage of the cereal.

Exports may total 2.8 million metric tons in the year ending June from 3.3 million tons in the previous season, Mohammad Azhar Akhtar, chairman of the Rice Exporters Association of Pakistan, said in a telephone interview. The value may jump to as high as $2 billion from $1.2 billion.

Pakistan, where rice is not a staple food, aims to boost its share of the global market as prices rise to a record. The Food and Agriculture Organization estimates global exports will drop 3.5 percent this year as China, India, Vietnam, Indonesia and Egypt curb shipments to secure supplies.

“There’s huge demand for Pakistan rice now,” Akhtar said. “We want to use this opportunity to capture world markets.”

Pakistan’s Commerce Secretary Syed Asif Shah wasn’t immediately available for a comment.

Rough rice for May delivery gained as much as 2.4 percent to $20.26 per 100 pounds on the Chicago Board of Trade. Prices have doubled in a year, threatening food security across Asia.

The FAO said in February that 36 countries including China face food emergencies this year. World rice stockpiles may total 72.1 million metric tons by the end of July, the lowest since 1984, the U.S. Department of Agriculture said.

India, the world’s second-biggest producer, banned shipments of rice this week to curb inflation that’s at a 13-month high. It set the minimum export price of aromatic Basmati rice at $1,200 a ton and restricted the number of ports for shipments. Neighbor Pakistan may not halt exports of the cereal, Akhtar said.

Not Staple

“Pakistan has plenty of rice and I don’t see any reason why the government would ban exports,” he said. “Rice is not a staple in Pakistan.”

Still, the South Asian country may ban exports of basmati rice to India to prevent re-export by Indian traders to meet trade commitments, Akhtar said. Pakistan produces 5.5 million tons a year and consumes about half of it. Exports include about 1 million ton of basmati rice, he said.

Export prices of 5 percent broken Pakistani rice was around $800 a ton, while basmati fetched an average $1,300 a ton.

“Farmers haven’t seen such prices and production next year may climb to 6 million tons,” he said. “We will also have comfortable carry-over stocks from this season.”

Rice stockpiles in Pakistan in the new season beginning July 1 may total 700,000 tons, up from 500,000 in the previous season, Akhtar said.

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Tags: exporter, grain, paddy, rice, shipment