Rice exporters have urged the government to stop export of semi milled FAQ quality rice, which is depriving the country of huge foreign exchange as the same rice after processing fetch premium export prices.
They said that export of semi-milled FAQ rice or uncleaned rice is not permissible under Pakistan's set standards of PSI but some unscrupulous exporters are exporting the same to India and some other countries, which is causing shortage in domestic markets at one hand and adding fuel to already escalated rice prices in the country.
At present, some foreign buyers are in Pakistan and finalising deals with some rice exporters for quality as it is and in bulk packing to secure speedy shipments of maximum possible quantities.
Surprisingly Rice Exporters Association of Pakistan (Reap) is also ignoring such unfair practice which may lead to a catastrophe in rice prices which is the second largest commodity consumed in country after wheat.
Rice exporters have requested Ministry of Commerce (Mincom), Ministry of Food, Agriculture and Livestock (Minfal), Ministry of Finance, and Trade Development Authority (TDAP) for immediate intervention otherwise country may face grain-drain resulting sky-rocketing prices beyond the reach of poor masses.
The country is facing severe consequences of former government policies in the shape of terrible food prices, which are only benefiting handful people engaged in speculative and hoarding activities. The present surge in rice prices has not benefited poor farmers who had already sold out their paddy at the time of harvest to sellers, millers and exporters.
Local consumers are forced to pay more than double price of commodity whereas hoarders are not ready to let the prices come down. Largely spread hue and cry in the country over alarming food inflation could only bent upon officials to hold meeting which ended with no outcome.
Hoarders have taken complete silence from government as blessing and raised unprecedented increase of Rs12,000 per ton in P-386 rice, a non basmati variety grown in Punjab and used for blending, in just four days. P-386 rice was traded at Rs60,000 per ton on Tuesday April 22, 2008 which was sold on Saturday at Rs72,000 per ton.
Market brokers are anticipating further increase in prices if government does not intervene. They said present increase in prices is because of semi milled FAQ quality supply to overseas markets. Export at lower prices while purchase at higher prices from domestic market indicates complete failure of existing rice export mechanism, which is only adding fuel to skyrocketing prices and rising inflation. On the other hand, lower export prices in comparison with other competitors in region, depriving Pakistan huge loss of foreign exchange.
Massive flow of semi milled uncleaned rice exports at lower prices may create shortage of rice in domestic market. Government should also restrict all supports which are encouraging hoarding in the country, causing price hike in essential edible commodities in order to provide relief to our poor consumers who are totally helpless in present situation with minimum monthly salary of Rs6,000.
"We urge government to squeeze rice financing as it has promoted hoarding in the country and hoarders are making huge profit on their hoarded stocks pledged with banks. If the rising prices of rice are curbed in domestic market it may lead to major food crisis and challenge to new government like wheat flour crises," said a rice exporter on request of anonymity.
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