Hamid Malik has had a long career as a rice commodity specialist. After completing his post-graduation from University of Agriculture, Faisalabad, he worked for various rice trading enterprises in Pakistan, before finally joining Rice Partners (Pvt.) Limited, an international rice milling company headquartered in Islamabad. Since then, he has worked for several multinational rice processing and trading businesses, including Induss Group India (Pvt.) Limited, and Aldahra Agriculture LLC, UAE.

In recent years, Malik has been working independently as a consultant on rice cultivation and trade for private sector corporations across Gulf and Africa. In his past life as a civil servant, Malik worked with government of Punjab’s Agriculture and livestock department.

He is also an active member of Agriculture Republic, an advocacy group of progressive agriculturalists focused on sustainable development of farming sector by encouraging resource-efficient practices and modernization of farm to market value chain.

BR Research spoke to Malik earlier this week to discuss fast changing trends in domestic rice cultivation, consumption, and exports. Malik shares insights as to why Pakistani farmers continue to love basmati despite challenging export environment, while also adding candid remarks on how Pakistan can successfully fend off the GI threat mounted by India. Below are the edited excerpts:

BR Research (BRR): Pakistan’s rice export volume has failed to breakthrough 4.2 million tons, peak levels it had achieved over a decade ago. Meanwhile, total production has jumped ahead from 6.5 to 8 million tons during the same period. Is Pakistan increasing its rice production to cater to increasing domestic demand?

Hamid Malik (HM): While it is correct that share of domestic consumption in total national rice output has increased over the years, it has largely increased in tandem with population growth rate. Remember that the latest population census shows that the annual population growth rate is about 2.2 percent.

Although share of exports in the pie has declined as a result, the constitution of exports has changed. Basmati export volume fell during the intervening years due to overvaluation of Pak Rupee. Basmati’s share was taken over by export of other varieties, whose exported volume has nearly doubled during the same period.

BRR: But Pakistan’s basmati production has also doubled during this period, growing to over 4 million tons in FY21 as per latest statistics. If basmati export volume is no longer growing beyond peak levels, does it mean that farmers are bringing more area under basmati cultivation for local consumers?

HM: Over the last couple of years, Pakistan has managed to restore its basmati export volume to near peak levels (0.9 million tons) after it had crashed below 0.5 million tons back in FY16. Nevertheless, it is correct that only a quarter of total 4 million tons domestic basmati production goes towards exports, while the rest is retained for domestic consumption.

Basmati rice is wildly popular among domestic consumers as its unique aroma has well-adapted to domestic culinary preferences. Over the last two decades, Pakistan has seen a rapid expansion of Horeca category – Hotels/Restaurants/Catering. Demand for basmati rice is extremely high in Horeca, especially due to its aromatic features.

Rise in per capita income over the past decade has also led to increased domestic basmati consumption, as consumers shift to more premium grains. It must be emphasized that basmati is consumed across all income groups and strata across society. While the higher income group prefers premium long grain basmati varieties, lower income groups may consume broken basmati grain which is much cheaper; but prefer basmati nonetheless. This is evidenced by the fact that several broken basmati rice brands have sprung up in recent years.

By my estimates, as much as 85 percent of 3.5 million tons of domestic rice consumption is accounted for by basmati and its derivative varieties.

BRR: It is generally understood that basmati has a very high-water footprint. Is it a good idea for Pakistani farmers to encourage cultivation of a high delta crop for domestic consumption purposes, considering that the country is increasingly water stressed?

HM: This is a non-scientific assumption. Non-basmati and hybrid varieties are sown during May and early June, when average temperature is highest. Non-basmati varieties usually have a 90-days irrigation period, of which 45 days fall during period of extreme temperature. During this period, water losses due to percolation, seepage, and atmospheric losses (evaporation) are highest, which is why these varieties also demand a lot more water application.

On the other hand, basmati cultivation begins after mid-July. This is peak monsoon season, when water availability is at its peak due to glacial melt and rainfall. As the humidity rate in the atmosphere is also high, evaporation rate declines. Thus, water losses under basmati cultivation are extremely low in contrast.

BRR: How do you view the statement of the new SAPM on agriculture that domestic farmers should shift to cultivation of coarse rice varieties as these are more popular in export market?

HM: Pakistan produces less than 5 percent of global coarse rice production. Because of low domestic preference for coarse rice, most of it is already exported.

Even then, Pakistani exporters find it hard to compete with neighbouring India in coarse rice export market on the basis of pricing. Indian government heavily subsidizes its coarse rice through commodity procurement operations and purchases at MSP from farmers. Few months later, volumes procured by the government are released at price that is less than full cost in the open market to be exported by commercial traders. Note that India’s rice subsidy mechanism is in violation of TRIPS agreement, yet Pakistan has not contested this practice officially under WTO.

In absence of similar government support or elimination of Indian subsidy mechanism, Pakistan will struggle to grow its coarse rice export volume significantly, especially if farmers shift away from basmati to coarse collectively.

Moreover, the size of global basmati export market is 5 million tons, where India already has a share of over 80 percent. If Pakistan reduces its basmati area, it will only lead to loss of potential export market, which no country other than India can fill in. The proposal seems to be based on inaccurate information regarding global rice trade dynamics.

BRR: Will it be correct to claim that the phenomenal increase in cultivation of hybrid rice in recent years is purely driven by export demand?

HM: Pakistan’s culinary preferences simply do not welcome hybrid rice. Even within low-income groups, hybrid rice may account for just 10-15 percent of their total rice consumption. Currently, most of the hybrid rice is mixed with IRRI-6, and then repackaged for export.

It must be remembered that Pakistan’s IRRI-6 variety had an established and stable export demand due to its highly competitive pricing, especially in African countries. However, poor farm economics has pushed growers to other crops in recent years. Because hybrid rice varieties enjoy much better yields – especially in Sindh province where previously IRRI-6 cultivation was more common – hybrid varieties are mixed with IRRI to cater to latent export demand.

However, as share of IRRI continues to decline, it will become harder to continue this practice, and Pakistan will have to develop hybrid-only export markets. Sustaining hybrid rice export is also predicated on R&D by seed companies, so that long-grain hybrid varieties may be developed and commercialized.

BRR: Is the Chinese market not primed for export of hybrid rice after the signing of FTA?

HM: It is true that China represents a major export market for hybrid varieties. However, the Free Trade Agreement alone cannot sustain its export to China. Rice is a political commodity, especially in South East Asia and Far East.

Because China has a strong and growing demand for grains, it imports large volumes of rice from other countries in the region such as Vietnam, Myanmar, and Thailand that helps maintain its influence in those countries. For example, China’s rice import from Vietnam is three times that from Pakistan. So, it will not be easy to grow our foothold in the Chinese market.

BRR: Is hybrid rice cultivation also becoming popular in Punjab?

HM: In recent years, hybrid rice cultivation is taking place in Bari doab (between Ravi and Sutlej) in central and southern Punjab. Because of its increasing popularity – hybrid rice yields as much as hundred maunds per acre – it is expected that it will soon make inroads in the southern belt of Rechna doab (between Chenab and Ravi) as well. Hybrid cultivation has also been witnessed in some regions of Jhang, Layyah, DG Khan, and even DI Khan.

BRR: Let’s now come to the subject of Geographical Indication. India excluded Madhya Pradesh from its basmati GI territory so as to buttress its exclusivity claim. By allowing unabated cultivation of basmati outside of Pakistan’s traditional basmati Kalar bowl, is GoP risking weakening of Pakistan’s claim?

HM: Basmati’s GI claim is based on the phenotypical expression of the variety, and not on its genotype. In my view, basmati territory is spread across the Himalayan terrain which includes all areas fed by water emanating from Himalayan region. Thus, all regions irrigated by the five rivers: Indus, Jhelum, Chenab, Ravi, and Sutlej may be included.

However, the GI claim also takes into account climatic conditions. The unique aroma of basmati comes from the fact that after the flowering stage, the crop matures under low temperatures at night. This is not true for most downstream areas beyond 500 kilometres where the climatic conditions change substantially.

BRR: Is it correct that other rice varieties are mixed or branded as basmati?

HM: Derivative varieties such as Kainat and 1509 are commonly classified and marketed as basmati. Remember that these two varieties came from the informal channels and have become tremendously popular due to their short duration and better returns on investment for farmers.

From a commercial perspective, Kainat and other varieties have gained popularity in Horeca – especially catering - because its yields better volume in cooked form. For example, equal quantity of uncooked Super basmati and Kainat would yield 100 versus 120 plates of steamed rice. As a result, caterers now prefer Kainat, even though it does not have the same aroma as Super basmati.

In comparison, Super basmati has a very strong demand in Iran, where non-aromatic Kainat has lost foothold because of inferior culinary attributes.

BRR: Is rice also consumed by the feed industry?

HM: Despite increasing rice production, its uptake by livestock industry has not improved due to reliance on outdated fodder practices. Even though combination of rice with molasses can help improve protein uptake for livestock animals. In contrast, demand from poultry industry is substantive. Residual use of rice was under 0.5 million tons 20 years ago; this had shot up to 1.3 million tons by last year.

Moreover, as wheat and maize production has fallen short of demand in recent years, increasing rice use by poultry feed industry has helped ensure that the country did not have to resort to maize import.