Pakistan's efforts to contest the European Union Commission's decision last December to withdraw the concession of abatement of import duty on exports of Super Basmati rice from Pakistan has ultimately been rewarded with success.
As a result, the rice exports to European Union countries booked last month will no more be facing the incidence of import duty of 250 euro per tonne. According to estimates, Pakistan's export of Super Basmati rice (Karnal variety) amounted to about $50 to 60 million annually. A further increase in rice export to EU countries may well be expected if the Pakistan is allowed to enjoy a level playing field in the EU market.
With the imposition of import duty, the country's rice exports to European Union were threatened with an adverse impact on the competitiveness of Pakistani rice.
The European Union abruptly announced on December 23, 2003 enactment of a law to withdraw the facility of abatement of customs duty to the extent of 250 euro per tonne on imports of Super Basmati rice from Pakistan.
The situation was immediately taken note of by the federal commerce minister Humayun Akhtar Khan, and commerce secretary Kamal Afsar who were reportedly visiting Brussels last month in connection with Pakistan's representation to the EU Commission against its impending decision to impose anti-dumping duty on Pakistan's bed-linen exports.
The immediate approach by Pakistani authorities on the issue of customs duty on rice exports was indeed a commendable response from the commerce ministry to safeguard the country's export interest.
Meanwhile, Pakistan's High Commissioner in London, Maleeha Lodhi also acted promptly and activated her staff to place a petition with the EU Commission asking for a review of the decision on the issue of Basmati import.
The petition received a positive response from EU Commission on January 13, 2004. But the EU has only temporarily allowed duty-free import of Super Basmati rice from Pakistan. This has provided a much-awaited relief to exporters who had concluded contracts with European buyers for the export of Super Basmati rice up to December 31, 2003.
However, the shipments against these contracts were held in abeyance due to a sudden decision by the EU Commission to impose import duty on rice exports from Pakistan.
It would appear that the EU Commission might once again propose imposition of import duty on rice exports from Pakistan after the completion of the delayed shipments by the 31st March 2004. In this context, the government's efforts to dissuade the EU Commission should continue with more vigorous arguments. Some reports indicate that the EU authorities have raised certain questions about the quality of the rice and the price quoted by Pakistani exporters.
These questions should be seriously taken up by both private exporters and the commerce ministry to avert the hanging threat of import duty on our rice.
It may be mentioned here that Pakistan has produced a bumper rice crop of various qualities, including Basmati, in the last season.
As a result the export surplus is likely to be substantially higher this year and therefore not only the traditional markets should be retained by our exporters with competitive prices and better-graded rice to foreign buyers but also new markets need to be explored.
One of the important reasons involving imposition of customs duty on Pakistan's rice exports is the policy of the European Union to strictly protect its farm products against imports from abroad, besides resort to subsidization of this sector on a broad scale.
The situation therefore warrants improvement in the quality of our rice for exports besides offering most competitive prices in the international market.
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