Dear REAP Members, 28-02-2013
After a gap of 5 weeks Rice market updates with special reference to India & Pakistan Rice sector is here for your attension.
President Asif Ali Zardari Visit to Iran Apart from burning issue of energy ,Rice & Grain Sector is one of the most crucial sector going to be effected.Rice export to Iran .Iran total consumption of Rice is 4.3 million tons.Domestic production this year is expected to be 2.4--2.8 million tons. Iran imports nearly 2 million tons every year,Basmati 65--70% & rest Non Basmati.India is the largest basmati rice exporter 1.2 --1.5 million tons(predominantly C1121.Pakistan basmati export to Iran varies from 260,000 to 90,000 /year in last 4 years.Non Basmati supplier are Thailand,Vetnam,Uruguay,US,Pakistan,India. Why india is selling more than Pakistan while time & transport cost is less from Pakistan.
Variety During last 4 years C1121 in steamed/Parboiled form is dominating the market.Now Pakistan also grows kainat,a Pakistan version of C1121.Equaly good,rather better than Indian C1121 which is 30% Sughanda.
Quality Thanks to Indian imported Parboiling plants Pakistan Kainat Sella & Steamed Rice(Iqbal rice & Reem Rice alongwith MATCO are leading exporters) from Pakistan is much better in quality.
Mode of Payment Due to heavy sanctions from UNO trade with Iran is limited to Food items & payments in $,Euro or yen is not allowed.India has by passed the sanctions by making payment arrangement in Indian Rupee for Bilateral trade.India import 8 billion $ crued oil for its refineries & this amount ,after converting into Indian Rupee is placed with authorised Indian Bank(s).When Indian exporters are paid out of that Rupee account with Indian Banks.Although due to approval & procedure payment is made in 3--4 months.Pakistan so far has failed to make such arrangements & our exportsare suffering heavily.
Geo Political factors
Both Iran & Pakistan have quite different interest from each other,being neighbour ,Afghan conflict & secterian devide. Current visit can be helpful if Pakistan sends a strong positive signal to Iran for better relations by signing Gas Pipeline(iran has already invested 5 billion dollar to construct its own side of pipeline),oil refinery & most important post troops withdrawl cooperation between 2 countries.Bilateral trade through Barter(Rice,Wheat,Sugar from Pakistan & crued Oil,fertilizer & Petrochimical products from Iran.) spacialy Rice can get boost.
Bottom Line Due to positive announcement from Iran & Pakistan,Rice & Wheat market can be Bullish in coming times.Our suggestion is to sell Rice at lesser pace,do not be panic.
Basmati secenerio: Indian millers/exporters have already liquidated(exported over 3 million Basmati till January from Apri last) 60--70% of their current crop ,domestic basmati prices are very strong(C1121 steamed rice 1385$/ton Karnal in unprocessed form),strong Super Brown demand & depriciating Indian & Pakistan currencies,weather improvement in northern Pakistan will help to maintain current level.
Non Basmati After remaining under pressure for almost one year Global prices have started inching up slowly due to Price increase in Vietnam Mekong Delta, Rising domestic prices in India(Parboiled rice is exception) & week monsoon forecast in subcontinent.Non Basmati stock holders can get benifit by playing their cards smartly. Further to our earlier report on possible effects of Paddy prices in India & Pakistan on REAP members,India & Pakistan weekly update is is hereby attached for yr information,if u do not want to recieve this update in future please notify to : To unsubscribe services of Riceplus Magazine mujahid.riceplus@gmail.com Sincerly from, Rice Plus Mag