The rice markets of country in the growing provinces of Punjab and Sindh witnessed historic increase in prices of this commodity on Monday as the Super Basmati rice new crop was traded at Rs 2700 per 40 kg (excluding cost of bardana) at Narowal (the main growing area of basmati) making the price of commodity all time high from its previous level of Rs 2400 per 40 kg on Saturday, market sources said.
The profiteers and hoarders in Karachi's grain market pushed the price of Super Basmati rice new crop to record level of Rs 67,000 per ton on cash payment from Rs 65000 per ton on Saturday at wholesale market while in retail market similar quality has increased up to Rs 85 per kg on Monday against Rs 75 per kg on Saturday.
"I have never seen such alarming increase in just a single business day" said a rice exporter, Shamsul Islam Khan. "We used to sell this variety of Basmati at Rs 9 per kg during early 1990 and there was hardly increase of Rs 10 to Rs 15 per 100 kg bag after two to three months those days but now increase in money supply has made vulnerable this commodity" he said.
The price of P-386 rice variety, largely grown in Punjab, increased from Rs 1900 per 40 kg to Rs 2200 per 40 kg showing steep increase. "Rice is the second largest commodity consumed as meal in the country after wheat which also reduces consumers demand pressure on wheat but now rice prices seem unaffordable by 80 percent of poor population and they will switch their entire dietary needs on wheat which will also push prices of wheat flour upward.
It is world-wide consumers' psyche of fixed income group that they consume more of commodity from food basket which is available at cheap price" Shams said. He said that looming food prices have made lives of lower and middle class of population miserable.
Poorest people living below the line of poverty are facing severe malnutrition and hunger despite of fact that Pakistan is an agriculture country and includes amongst the largest wheat and rice producing countries. Unscrupulous hoarders and profiteers have accelerated their activities owing to increasing demand and complete negligence from concerned authorities which has pushed rice price of all varieties to unprecedented high levels.
Since the new cabinet has been sworn in and ECC has been reconstituted, no solid plan has been announced by the government to arrest the spiralling food prices and curb drastically soaring inflation to provide relief for poor people as continuous price hike of essential commodities is crushing them every day, rice exporters said.
Rice prices of all varieties started soaring in December 2006, and have reached now to exorbitant levels but government has not yet taken any corrective measures to control price hike. The profiteers have made this commodity dearer to the poor masses of the country earned billions of rupees profit through speculation and did not paid a single paisa to government as tax.
They are fearlessly operating in all grain markets of the country, making billions of rupees transactions through their established network. People who do not belong to rice export or local trade are hoarding huge stocks which has erupted supply side and increased the prices of rice, another rice trader said.
Rice millers, traders and exporters, who have huge finance facilities as well export refinance facilities (ERF) are also hoarding rice stocks in bulk quantities against pledge of stocks.
Punjab Super Basmati new crop which was stored in warehouses at purchased cost of Rs 45 per kg in December 2007 has increased to Rs 75 per kg in local market just within four months period. P-386 rice which was stocked at Rs 25 per kg in December 2007 has crossed domestic price of Rs 56 per kg on Saturday.
He said that bank financing and export refinancing at lower rate of interest was fuelling food prices in general and rice in particular. He was of the view that if State Bank of Pakistan does not withdraw all kind of financing from essential food items, prices of these commodities will further heightened to unprecedented levels.
He said that the government should immediately withdraw financing and other supports that boost hoarding activities and crack down on hoarders by announcing severe penalties and imprisonment. Real farmers who live in rural areas and grow food commodities must be encouraged by supporting loans in terms of providing them tractors, certified seeds, fertilisers and pesticides.
This will help them to get rid of centuries old middle man system which in deed suck the real income of poor farmers. Besides, government should also keep buffer stocks of wheat, rice and other essential food commodities in the country as other governments of the region are doing.
This will help government to keep smooth price levels of essential commodities to encounter nasty hoarders and speculators. These stocks may be released at the time of any uncertain situation emerged in the country to control price hike.
"Our export policy should be reviewed and imports should be used as tool for value-addition and re-export", rice exporters said. Export of brown rice is bitterly damaging the exports of white rice and make no benefit to the country as it has to compete with own Pakistani milled value-added rice in the same international market.
Further, owing to high moisture content, brown rice is causing problems to the indigenous milled white rice in many countries. The Ministry of Commerce should also discourage the sale of basmati rice in bulk quantity through tenders as this low price exported commodity compete with export of value added basmati rice in the particular country.
Export of Pakistani branded Basmati rice in consumers' packing of 25kg should be allowed and export of basmati rice in bulk packing or loose in containers must be restricted to fetch premium price of our branded Basmati rice in the international market.
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