Bankruptcy feared: Rice millers seek TCP's, Passco's intervention

Pakistan Rice Mills Association (PRMA) on Monday urged the government to direct Trading Corporation of Pakistan (TCP) and Pakistan Agriculture Storage Service Corporation (Passco) to intervene in the market by purchasing rice from rice-shellers to enable them to repay their bank loans.
Mukhtar Ahmed Khan Baloch, Chairman PRMA, while speaking at a press conference said that 75 percent of mill owners had purchased rice by using loans from banks at high mark-up rates. "In case the government does not intervene in the market till June 30, 75 percent of rice mills would become bankrupt," he says.
He said the government needed to bailout sinking rice sector, otherwise rice-shellers would be unable to purchase paddy from farmers in the next season. Due to current situation the future of thousands of rice mill workers and their families was at stake as owners had no money to pay their wages, he said. Baloch said 75 percent of rice mills had failed to sell rice in last two years as a result they were unable to clear their bank liabilities and were unable to pay high mark-up to the banks.
"The government needs to declare rice-shellers a sick industry and direct all banks through State Banks of Pakistan (SBP) to waive off the bank interest and direct TCP and Passco to purchase rice from them. The government should direct the TCP to co-operate with the millers by making all the necessary arrangements to export rice, thus enabling the millers to repay their bank loans and other liabilities," he said.
Baloch said that due to the government's poor policies, over 0.4 million tons of super kernel baamati rice was still lying in different warehouses across the country. He said they had purchased rice at Rs 2,600 per maund in 2013-14. "After polishing and processing, the cost came to Rs 5,500 per maund. However, nobody is willing to purchase the rice at that price," he said. He said the situation was turning against Pakistan and in favour of India which had introduced its own brand. Indian rice was cheaper due to hidden subsidies, as a result Pakistan had lost Iranian and Middle Eastern markets, he said. He also urged the government to increase rice exports to Iran.