Pakistan eyes $1 billion rice export to China

Pakistan eyes $1 billion rice export to China

Pakistan eyes $1 billion rice export to China

Soaring rice demand in China prompted Pakistan to estimate the commodity’s export growth to $1 billion to the neighbouring state alone….but the trade needs government’s priority, it is learnt. China has emerged as new rice exporting market for Pakistani traders and rice export to neighbouring country has witnessed a robust growth during last year.

With an increase of 6000 percent, Pakistan has exported rice worth $268.69 million to China during 2012 compared to $4.278 million in 2011. Since Pakistan is facing huge trade imbalance with China, increased export of rice from Pakistan to China could contribute to reduce the trade gap between the two countries. 

Besides increasing import trend of rice in China, there are certain reports including that of USDA forecasting that during 2013 around 2.5 million tons of rice may be imported by China. Rice import by China started increasing in 2011 and the overall import hit a record high of $1.12 billion in 2012.

Vietnam and Pakistan have replaced Thailand as leading exporters of rice to China. Sources said a very high level visit from China to Pakistan is expected later this month, while 2nd phase of Pak-China Free Trade Agreement (FTA) negotiations is also due this month. “Both these important events are providing an opportunity to Pakistan in further facilitating import of rice from Pakistan to China,” they added.

Commercial section of Consulate General of Pakistan in Chengdu is making concerted efforts to capture this new rice market by increasing rice export up to $1 billion to China through some relaxation in the quota restriction. As part of these efforts, the commercial section has prepared a research on Chinese rice market; inculcating interest among Pakistani rice exporters to divert their attention to this lucrative market.

Chengdu Commercial Counsellor Dr Saifuddin Junejo has also written a letter to Secretary Ministry of Commerce Munir Qureshi for preparation of agenda for negotiations with China. “The ministry may consider making this as an important agenda item for forthcoming FTA talks and Chinese delegation visit scheduled for this month,” the commercial section urged.

According to the Pakistan’s Commercial Counsellor, with the rising rice demand in China, export from Pakistan to China could reach $1 billion if this single commodity is given its due and important consideration. Leading Chinese corporations (State Owned Enterprises) such as COFCO are engaged in import of more rice from Pakistan and import quota restrictions can be relaxed through negotiations with relevant Chinese authorities.

During 2012 and first quarter of 2013, it has been witnessed that import of rice in China from different countries is increasing to record levels. The import data reveals that in 2012 China imported rice worth $1.125 billion reflecting an increase of around 200 percent whereas increase during first quarter of 2013 is around 130 percent.

This trend of increasing import actually started in 2011 but sharply increased in 2012 and is continuing in 2013. The causes of such a huge surge in import of rice in China are considered to be: (i) increasing demand with growing new prosperity in China and (ii) high price of domestic rice set by central government as compared to cheaper imported rice of comparable grade to the extent of 35-55 percent depending upon country from where rice is imported, the commercial section said.

Meanwhile, talking to Business Recorder Reap Chairman Javed Ali Ghori said in last two years, China has become a major rice importing country in the region. In the current situation, when the country’s rice export is declining, emerging Chinese market will help earn more foreign exchange.

As per our estimates, China consumes around 140 million tons of rice every year and it is not only consumed as cooked rice for daily meal three times but it is also consumed as rice noodles, rice cakes as well as packaged instant food, he added. He said that Reap has planned to participate in the upcoming 5th China South Asia Commodity Fair in Kunming in June 2012 as the commercial section has already offered its services and full corporation for arranging a visit of China by leading Pakistani rice, millers/exporters.

This visit will help explore China as new rice market for Pakistan. Chairmen Reap said presently IRRI-6 rice is being exported to China and there are huge opportunities to introduce more varieties of rice. Ghori appreciated the efforts of the Commercial Counsellor and hoped that with the help of the commercial section in Chengdu, Pakistan will achieve landmark $1 billion rice export to China.