The government is likely to allow export of rice to any country on government to government basis as Pakistan Agriculture Storage and Supplies Corporation (Passco) is shouldering Rs 11.5 million interest per day on loans taken from banks for paddy procurement, sources close to Agriculture Minister told Business Recorder.
"We have proposed that the government should allow export of rice to Middle East, Iran, Europe and any other market on government to government basis, sale or export through qualified agents/brokers (local as well as international) and approval of $900/ton as minimum base price for Super Basmati within 5 percent limit of broken rice," they said.
Giving details, they said Pakistan harvested a record rice crop of 6.9 million tons in 2008-09 as against 5.6 million tons in the previous year. To stabilise the price of rice in the backdrop of record domestic crop and fairly good global production, the government decided to procure 1.0 million tons paddy (0.5 million tons from Punjab and aggregate 0.5 million tons from Sindh and Balochistan).
Passco was authorised to purchase Super Basmati paddy at Rs 1500 per 40 kg and Irri at Rs 700 per 40 kg. Passco purchased 0.461 million tons of Super Basmati paddy from Punjab and 0.214 million tons of Irri-6 paddy from both Sindh and Balochistan. Total procured quantity was 4,35,832 tons, of which 2,18,382 tons was Super Basmati, 3,297 tons Basmati 2000/385, 1,57,931 tons Irri-6(FAQ), 55,222 tons Irri-6 (rain damaged).
Sources said that total disposed of quantity through tender was 1,66,534 tons which includes 1000 tons Super Basmati, 1,11,509 tons Irri-6 (FAQ) and 54,025 tons Irri-6 (rain damaged). The buyers have not lifted procured Super Basmati and Basmati 385 whereas 61,722 tons of Irri-6 (FAQ) and 15,444 tons Irri-6 was damaged.
According to sources, 2,19,382 tons Super Basmati, 3,297 tons Basmati (385), 96,209 tons Irri-6 (FAQ) and 39,778 tons Irri-6 (rain damaged) is still lying in the Passco goodowns. Sources said that the overall maintenance cost including incidentals of rice purchased by Passco amounts to Rs 26 billion and Passco is bearing Rs 11.381 million per day as mark up for carrying over the rice stock.
Apart from this, Passco owns 0.34 million tons useable storage capacity which is occupied by rice stocks while for the rest of the quantity Passco has been paying huge rents. Due to Passco's limitations, financial imperatives, limited storage capacity, heavy bank borrowing and mark-up immediate disposal of the rice balance lying in Passco godown has become essential.
Offloading of rice stocks in the local market would result in lowering the current market price of Super Basmati which improved from Rs 650 per 40 kg in the first week of November to Rs 1000 per 40 kg by re-inducting Passco to purchase paddy from the farmers to stabilise the dwindling market. Under the circumstance, Minfa has requested the Economic Co-ordination Committee (ECC) of the Cabinet to look for avenues to export rice lying in Passco's stocks.
Sources said that most of the concerned Ministries have supported the proposal. However, Commerce Ministry is of the view that there shall not be commercial sale/international bidding. MEP is applicable only on the stocks held by Passco and agents and brokers should be selected on the basis of notified/publicised criteria through a transparent mechanism.