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Arab News
2 days ago
- Business
- Arab News
Pakistan eyes bigger share in US rice market after Trump's 50 percent tariff on India
ISLAMABAD: Pakistan is seeking to increase its rice exports to the United States (US) to 100,000 metric tons this financial year, up from 80,000 metric tons last year, after President Donald Trump imposed a 50 percent tariff on regional competitor India, the head of the country's rice exporters association said this week. Pakistan ranks among top ten rice-producing countries in the world. According to the latest Economic Survey of Pakistan, the country's total rice production stood at 9.72 million metric tons in the outgoing fiscal year that ended in June. In Pakistan, more than 60 percent of the harvest is surplus and available for export, according to the Rice Exporters Association of Pakistan (REAP). The country exported over 5.544 million metric tons of rice, valued at $3.203 billion, worldwide from July 2024 till May 2025. India, on the other hand, exported 234,467 metric tons of rice to the US alone in the fiscal year 2023-24, valued at $0.31 billion, according to the Indian commerce ministry. However, Trump last month imposed a 50 percent tariff on India, citing New Delhi's imports of Russian oil and its trade barriers on US, and reduced the tariff on Pakistan from 29 percent to 19 percent. 'This [tariff difference] presents a major opportunity for Pakistan to fill the gap and expand its rice exports to the United States,' Malik Faisal Jahangir, chairman of the Rice Exporters Association of Pakistan (REAP), told Arab News on Wednesday. 'Last year, Pakistan exported 80,000 metric tons of basmati rice to the US and this year, we aim to exceed at least 100,000 metric tons by leveraging this tariff advantage.' The US Department of Agriculture (USDA) reports that rice imports in the country have consistently risen over the past 30 years, increasing from 7 percent of the domestic market in 1993-94 to more than 25 percent in 2022-23. Over 60 percent of these imports are aromatic varieties from Asia, predominantly jasmine from Thailand and basmati from India and Pakistan. Pakistani rice is of much better quality than India's and far more compliant with US regulations and standards, according to Jahangir. Islamabad could also enjoy a significant competitive advantage in terms of price. 'The 50 percent tariff on Indian rice will effectively price it out of the US market,' he added. Pakistan struck the trade deal with the US late last month, with the government in Islamabad saying the agreement would increase investments in the South Asian country. A key China ally, Pakistan has been warming up to Trump after he threatened tariffs and has credited US diplomatic intervention for ending a four-day military standoff with India in May. Islamabad has also nominated Trump for the Nobel Peace Prize. Pakistan exports basmati rice to more than 110 countries, with the Middle East and Europe remaining its primary markets, according to official data. Pakistani commerce ministry spokesperson Naveed-ul-Haq Kallu said the government is in contact with REAP to fully capitalize on the opportunity to boost Pakistani rice exports to the US. 'Pakistan's commerce ministry has asked rice exporters to submit their recommendations to help fully capitalize on the opportunity to boost Pakistani rice exports to the United States,' Kallu said, adding that rice exports are incorporated into the ministry's tariff implementation strategy that has been forwarded to the prime minister for approval. 'The government will continue working closely with the association to provide maximum facilitation for exporters as it is keen to leverage the advantage created by the new tariffs.' Arab News tried reaching out to the Pakistani embassy in Washington and the Trade Development Authority of Pakistan (TDAP) regarding their trade facilitation efforts but did not receive a response by the time of filing of this story. Pakistani exporters and analysts view the new US tariffs as a major opportunity but warn that stringent quality standards would be a key challenge in meeting the US Food and Drug Administration's (FDA) approval. 'We have very small share of around 4.5 percent of the total US rice imports but have this opportunity to take it forward and gradually doubling it, if tariff issue with India persists,' Abdul Basit, a manager at leading Pakistani rice exporter Guard Rice, told Arab News. Basit noted that although an opportunity exists, attention needs to be given to ground realities as he stressed the importance of producing basmati rice that met both quality and the FDA's compliance standards. 'We need to assess how much FDA-compliant rice we can source from our farmers as failing to do so could expose us to numerous non-tariff barriers from the US, particularly strict regulations on pesticide levels,' he added. The Guard Rice official described the US tariffs as a 'great opportunity' to expand their presence in the US market, adding that his company, which initially exported around 3,000 metric tons to the US, is now planning to double that volume. Sana Taufik, head of research at Arif Habib Limited investment and financial services firm, said Pakistan's ability to capitalize on the advantage depends on production, which was hit by climate change and the recent floods. 'This issue needs to be addressed and Pakistan should invest in research and development to drive better growth,' she said. Pakistani products should be patented and branded as the country has so far secured few patents and could not claim royalties, unlike India, which established this advantage long ago, according to Taufik. 'These challenges could hinder Pakistan's ability to capitalize on the opportunity created by the high tariff on India,' she said. 'But with better coordination, the country can gradually expand its share of the US market for Pakistani basmati rice.'
Nikkei Asia
17-07-2025
- Business
- Nikkei Asia
Indian rice exporters curb forecast as glut squeezes margins
Rice from India inundated global markets earlier this year after the South Asian country, which makes up about 40% of global exports, lifted a number of export curbs. © Reuters SOUMYAJIT SAHA MUMBAI -- Rice traders in India, the world's biggest supplier of the staple, are paring back their forecasts of record exports as buyers struggle to take on the glut of rice unleashed by the lifting of the country's export curbs. This comes as Indian exporters find themselves in a similar situation to their peers in Thailand and Vietnam, who have been hit by the drop in prices caused by the Indian oversupply. India's Rice Exporters Association has cut its growth forecast of total rice exports for 2025 to 11%, amounting to about 20 million tons, down from its earlier forecast of a 25% jump to 22.5 million tons, B.V. Krishna Rao, the group's president, told Nikkei Asia.
The Hindu
23-06-2025
- Business
- The Hindu
Rice exporters stare at major disruptions, payment delays amid escalating Iran-Israel conflict
With the escalation of Iran-Israel conflict, rice exporters in Haryana -- which accounts for 30% of the country's basmati rice shipments to Iran -- are struggling with major disruptions in ship movements and payment delays. While Karnal is the main hub of basmati exports, Kaithal and Sonipat too contribute to the foreign demand. "The ongoing Iran-Israel conflict has impacted the trade," said Sushil Jain, Rice Exporters Association's state unit president. "Nearly 10 lakh metric tonnes of Basmati rice is exported from the country to Iran, of which Haryana's share is about 30-35%," he said, adding that shipments of about 1 lakh metric tonnes of basmati rice for Iran are stuck at ports. Besides, the payments amounting to ₹1,500 crore to ₹2,000 crore for nearly 2 lakh MT of the rice exported to Iran by Indian exporters has also got stuck due to the conflict, Jain said. The escalation in the conflict is going to impact the Indian market which is already witnessing some fall in the prices, he said. "Another issue which the exporters are facing is the lack of insurance cover for the vessels during war which increases the risk for us," he added. Iran is India's second-largest basmati rice market after Saudi Arabia. India exported around 1 million tonnes of the aromatic grain to Iran during the 2024-25 fiscal year. India exported approximately 6 million tonnes of basmati rice during 2024-25, with demand primarily driven by the Middle East and West Asian markets. Other major buyers include Iraq, the United Arab Emirates and the United States. The Israel-Iran conflict has escalated significantly in recent weeks, with both sides exchanging heavy strikes and the U.S. becoming directly involved in the hostilities. The shipping disruption adds to challenges facing Indian rice exporters, who have previously dealt with payment delays and currency issues in the Iranian market due to international sanctions. On Sunday (June 22, 2025), Prime Minister Narendra Modi conveyed to Iranian President Masoud Pezeshkian India's "deep concern" over Iran's conflict with Israel and called for immediate de-escalation of the situation through "dialogue and diplomacy". The phone conversation initiated by Pezeshkian came hours after the US bombed three major nuclear sites -- Fordow, Natanz and Isfahan -- in Iran.
Zawya
28-05-2025
- Business
- Zawya
India raises purchase price of rice by 3%, lowest increase in five years
India has raised the price at which it will buy the new-season common rice paddy variety from local farmers by 3%, the lowest increase in five years, as New Delhi struggles to manage overflowing granaries after last year's record harvest. India is the world's second-largest producer of rice and the biggest exporter in the world with a market share of more than 40%. For the common grade of rice paddy, the government has fixed the support, or guaranteed price at 2,369 rupees ($27.76) per 100 kg (220.46 lb), up from 2,300 rupees last year, Information and Broadcasting Minister Ashwini Vaishnaw said on Wednesday. Last year, India raised the rice paddy purchase price by 5.4%. The small rise in the support price will help exporters remain competitive in the world market against rivals such as Thailand and Vietnam, B.V. Krishna Rao, president of the Rice Exporters Association told Reuters. Every year authorities raise the support price of staples such as rice and wheat to build stockpiles to run the largest food welfare programme in the world, providing access to free grains for those most in need. But rice stocks, including unmilled rice paddy, in government warehouses totalled 59.5 million tons on May 1, more than four times a government target. The government is sitting on excess rice stocks and struggling to sell them, said a Mumbai-based dealer with a global trade house. "It doesn't want a big spike in production since that would mess things up. It's hoping farmers switch to other crops instead," the dealer said. Rice yields are affected by seasonal monsoon rainfall as rice is a water intensive crop. India's weather department has forecast above-average monsoon rainfall for the second straight year in 2025. India also raised the cotton purchase price by 8.3% to 7,710 rupees per 100 kg and the soybean price by 8.9% to 5,328 rupees per 100 kg. (Reporting by Rajendra Jadhav and Mayank Bhardwaj; Editing by Sudipto Ganguly and Rachna Uppal)
Reuters
28-05-2025
- Business
- Reuters
India raises purchase price of rice by 3%, lowest increase in five years
NEW DELHI, May 28 (Reuters) - India has raised the price at which it will buy the new-season common rice paddy variety from local farmers by 3%, the lowest increase in five years, as New Delhi struggles to manage overflowing granaries after last year's record harvest. India is the world's second-largest producer of rice and the biggest exporter in the world with a market share of more than 40%. For the common grade of rice paddy, the government has fixed the support, or guaranteed price at 2,369 rupees ($27.76) per 100 kg (220.46 lb), up from 2,300 rupees last year, Information and Broadcasting Minister Ashwini Vaishnaw said on Wednesday. Last year, India raised the rice paddy purchase price by 5.4%. The small rise in the support price will help exporters remain competitive in the world market against rivals such as Thailand and Vietnam, B.V. Krishna Rao, president of the Rice Exporters Association told Reuters. Every year authorities raise the support price of staples such as rice and wheat to build stockpiles to run the largest food welfare programme in the world, providing access to free grains for those most in need. But rice stocks, including unmilled rice paddy, in government warehouses totalled 59.5 million tons on May 1, more than four times a government target. The government is sitting on excess rice stocks and struggling to sell them, said a Mumbai-based dealer with a global trade house. "It doesn't want a big spike in production since that would mess things up. It's hoping farmers switch to other crops instead," the dealer said. Rice yields are affected by seasonal monsoon rainfall as rice is a water intensive crop. India's weather department has forecast above-average monsoon rainfall for the second straight year in 2025. India also raised the cotton purchase price by 8.3% to 7,710 rupees per 100 kg and the soybean price by 8.9% to 5,328 rupees per 100 kg.
