Rice exports fall sharply in February despite government subsidies

ISLAMABAD: Pakistan's rice exports experienced a significant decline in February, despite the government's efforts to support the sector through subsidies. According to official data from the Pakistan Bureau of Statistics, rice exports dropped by 35.38 percent during the month, raising concerns among exporters about the effectiveness of the government's support scheme.

The government had introduced a subsidy programme aimed at boosting rice exports by offering a 3 percent duty drawback on local taxes and levies for coarse rice and a 9 percent duty drawback for basmati rice exports. Approximately Rs15 billion was allocated under this scheme to provide rebates to rice exporters.

However, exporters have expressed reservations about the impact of the subsidies. They argue that the programme has inadvertently led to higher domestic prices, making Pakistani rice less competitive in international markets. Exporters also pointed out that the cash support has not delivered the intended benefits and has, in fact, undermined the country's export potential.

Official figures show that basmati rice exports fell by 19.21 percent in value and recorded a negative growth of 27.98 percent in quantity during February. The export of coarse rice also saw a significant decline, dropping by 42.50 percent in value and 32.94 percent in quantity.

Stakeholders in the rice sector have identified high domestic prices and hoarding as key factors contributing to the decline in exports. They maintain that these issues, combined with the effects of the subsidy programme, have negatively impacted Pakistan's position in the global rice market.

The recent data and feedback from exporters have prompted calls for a review of the current subsidy scheme to address the challenges faced by the rice export sector.