Rice is rapidly going beyond the reach of common man in Multan and other parts of southern Punjab as the local grain market has virtually gone under the control of speculators who not only spark an artificial hike in prices but also put the entire export of commodities at stake.
A magnificent example of the control exercised by the hoarders and speculators over commodities' trade is rice whose prices have surged by an average of 20 percent just during past 10 days in the wholesale markets. This has given a jolt to exporters who are running from pillar to post to get the grain to meet their export orders.
"Since morning, my team and I have been trying hard to get a truckload of Irri-6 rice (around 25 tons) to dispatch a consignment to Colombo, but failed," Abdul Rahim Janoo, a leading rice exporter, said here on Wednesday.
"The shipment of 1,000 tons coarse rice is being delayed due to shortage of 25 tons rice," he said, and added that "many exporters, who got letters of credit (L/Cs) before the beginning of the season, are now in hot water. They have no option but to pay penalties."
Just after the Eid holidays, the market opened with Irri-6 rice at Rs 17,000 per ton which, on Tuesday, was selling at Rs 19,000 to Rs 20,000 per ton. Same was the case with Irri-9, which rose to Rs 22,000 to Rs 25,000 per ton. PK-386 variety was being sold at Rs 34,000 for a ton, after an increase of Rs 9,000, and Super Basmati at Rs 50,000, a surge of Rs 6,000, market sources said.
"The market is volatile due to late arrival of the crop," Abdullah Hashwani, another leading exporter of the grain from Hassan Ali and Sons said. "Now, harvesting is in full swing, and arrival will be smooth in the next 10 to 15 days which will help in stabilising the market," he opined.
Experts expect crop shortage of 30 percent this year, which might also reduce the availability of rice for export. Generally, Pakistan harvests around five million tons rice each year and official exports amount to 2.1 to 2.2 million tons. Last year, rice exports dropped to 1.9 million tons.
The main factors causing massive drop in the crop size were: shortage of irrigation water by 23 percent this year for Sindh, which is the core growing area for coarse rice; heavy monsoon rains, which washed away saplings from fields and forced the farmers to re-sow; non-availability of good sunlight in September and October; and late sowing, Abdul Ali Zakir Usmani, President of Anjuman Kashtkaran and an agricultural expert said.
"Due to the late crop, paddy is not good and grain size is small. This adversely affects the yield," he said. Even this year, growers and millers are at the receiving end as middlemen have entered the arena with big investments, market sources said.
Paddy prices have not been increased rationally and the middlemen are buying from the fields at very low prices, but selling to the millers on big margins, he said. These middlemen have a good experience of last year when fortune showered millions of rupees over them. That was why they are very much active from day one, sources said.
"If the market continues to act in the same way, Pakistan will be out of the list of rice exporter countries," a young and enthusiast grain exporter, Shamsul Islam, expressed fear. "Rice exporters' list is shrinking each day, and big rice exporters have diversified to other trades," he said.
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