LAHORE: Healthy basmati production, carry over stock from the last season and negligible demand for exports at present have resulted in lower prices of Basmati paddy, creating unrest among the growers who fear that they will not be able to meet event their input cost.
Paddy (Super) which was opened at Rs 2400 per maund last year is being traded at Rs 2000-2100 per maund this year while Kainat (1121) which was opened at Rs 2200-2300 per maund last year is being traded at Rs 1900-2000 per maund this year.
Growers, arhtis and other stakeholders claiming this asked for a government intervention such as purchase of paddy or rice by the Pakistan Agricultural Storage and Services Corporation (PASSCO) or the Trading Corporation of Pakistan (TCP) so as the prices can be lifted to a level, which is beneficial for the growers.
Growers harvesting their Basmati crop in a village Ganawar near Sadhoke while talking to a group of journalists expressed their concern over the low price being fetched by the commodity. They were of the view that this price will even not meet their input cost and labour. They said that the government should devise some mechanism to fix the minimum purchase price for rice as well as it does in the case of wheat, sugarcane or cotton. Dealers Muhammad Abbas and Mahmood at the New Grain Market, Kamoke also expressed the same and demanded that the government should purchase paddy like wheat to support the farmers.
A progressive grower and exporter, Sami Ullah Naeem throwing light on the issue said that they are expecting over 2 million tons of Basmati production this year but the price is very low in the market. He said that prices are fixed while keeping in view three factors that are carry forward stocks, current production and demand in the export and domestic market. He said that Pakistan did not have a carry forward stock for the three years consecutively but last year it had about 7 per cent carryover stock. He disclosed that production of Basmati is 10 per cent higher this year while area under Basmati has also increased in Southern Punjab.
To a question, he said unfortunately there was no department in the country which could have real data and figures. He said that last year exporters exported some 900,000 tons of basmati.
There was demand because of fear of food security in the wake of COVID-19 and importers bought more than the routine. However, he said that there was a dip in the demand during the last quarter of current year due to which inventory and capital had stuck. He also termed the weak financial position of Iran as a factor behind low demand.
Replying to a question Sami Ullah said instead of government intervention in the prices, efforts should be made to promote mechanized farming. 'We can increase plant population rather double it per acre by using the mechanized rice planters instead of sowing by hand. New seed with better germination rates and service provider companies are also needed which can provide machines on rent,' he added and said usage of Kabuta harvesters instead of traditional harvesters help minimizing the post-harvest losses.
He said that the government should setup modem markets which should be situated out of the city. These model markets can be developed on the pattern of a market already functional in Hafizabad. These markets should have arrangements to take care of commodity in case of rain or any such situation.
Hamid Malik, a leading consultant of rice trade, while talking to Business Recorder said that yield per acre and milling recovery both have increased this year. He admitted that prices are lower but at the same time said that increased production may compensate it for growers. However on export scene, he claimed this year Pakistan's exports of Basmati can be 12-15% lower on lower global demand & stiff competition from India.
Copyright Business Recorder, 2020
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