EDITORIAL

Rice exporters demand must be met

According to a report, rice exporters have demanded 0.5 per cent reduction in the withholding tax to the exporters sending their products in 50kg packing with a brand name irrespective of whether it is registered or unregistered, but marked with “Production of Pakistan.” This demand was recommended by a workshop organised by the Rice Exporters Association of Pakistan (REAP) on “Rice Brand Development in Karachi” on Wednesday. It was observed that the exporters should develop and promote Pakistani branded rice slowly and gradually in order to penetrate into the international market with quality products. The idea behind the approach is to encourage participation of the entire community of rice producers and exporters. For it was observed that in case the concession was granted to a few exporters, it would not be possible for others who were not allowed the concession of 0.5 per cent, it would not be possible to join the big national effort with the needed unity of thought and purpose.
It will be recalled that it was only the other day that Rahim Janoo, Chairman Rice Exporters Association of Pakistan (REAP), speaking at the inauguration of REAP House at I. I. Chundrigar Road, in Karachi had given the happy tidings of rice exports touching a record high of 600 million dollar this year and the commodity soon joining the billion dollar export basket. It was than that he made a pointed reference to exemption of sales tax on import of machinery for rice industry, expressing the hope that customs and other taxes would be removed on the import of rice related machinery. He said that exporters were facing difficulties in export of rice to Philippines, Sri Lanka, Iran, Indonesia and China. However, to sustain the present export drive and to have access to new markets the government sponsored delegations, REAP members, must visit African states and Gulf states regularly.
It will be noted that Colonel Akbar Hussain (Retd), Chairman Export Processing Zone Authority, who performed the inaugural ceremony in absence of the chief guests, - Commerce Minister Humayun Akhtar and Sindh Chief Minister Ali Muhammad Khan Mehar- paid rich tributes to REAP, which has made big progress towards regaining the past glory for high quality Pakistani Basmati, that was being earlier sold in Indian packing. Seemingly inspired by REAP’s performance, he invited its members to set up processing plants at the Karachi Export Processing Zone (KEPZ). He also promised to help it get a place on the Board of Trustees of Karachi Port Trust. In so far as the meeting the challenge on the rice front is concerned, some recent reports had it that Pakistan expected to harvest 4.3-4.6 million tonnes of rice in 2003/04 due to a rise in area and heavy monsoon rains. In this regard it has been pointed out that exporters plan to boost sales to take advantage of an expected rise in the world prices. Traders in Karachi are very hopeful about increased sales to traditional African, Yemen and Saudi Arabian markets and of a breakthrough in direct sales to Iran.
As the situation now happens to be they view Iran as their potential market, where the government imports at least 800,000 tonnes of superior quality rice a year to help meet domestic demand of 2.8 million tonnes. It has, however, been pointed out that Iran was currently buying the bulk of Pakistani rice through Dubai-based traders. As it costs higher due to third-party involvement and higher freight costs, they are showing interest in direct purchase from Pakistan. An idea of increased prospects to Iran may be had from the fact that Iran bought something like 365,000 tonnes of Pakistani superior quality Basmati rice in 2002/03 through third parties. Now, that the rice exporters have been making strenuous efforts towards increasing exports from the modern thrust of branded products, the government should extend them every possible incentive besides support in encouraging the producers and exporters to enable them to compete in the international market from attractively lower prices and quality standards.