How to enhance rice exports
MOHAMMAD YAWAR IRFAN KHAN
Pakistan is one of the best basmati rice producers of the world
yet it has failed to capture the big markets. During the last
decade or so, Pakistan has shown regression in every progressing
rice market as the overall rice market grew, but Pakistan has
been staggering with uncertain ups and downs while the Indian
Basmati rice has achieved a tangible growth.
The Indian product is in greater demand than the Pakistani one
because the former has established its goodwill and reliability
in the market. On the whole, this scenario demands focus on
Pakistani performance in the global market.
Initially, the Rice Export Corporation of Pakistan (RECP) has
been exporting rice of all varieties in bulk quantities. The
private sector was a late entrant in rice exports. The RECP
followed a specific strategy for export of rice to the Gulf.
During the 80s it started appointing sole agents and
distributors.
This was the start of the downfall of Pakistani position in the
market. These Pakistani agents remained interested in maximising
their own profits, who imported rice in bulk and controlled the
supply to create more demand and increase in price. In such a
scenario, the importers and buyers were forced to turn towards
India. This was the time when India adopted targeted marketing
of the product and Pakistani rice was left behind.
Once the role of the RECP fizzled out and the private sector was
allowed to export the product then every registered exporter
thought it very easy to export rice from the country.
Unscrupulous exporters played havoc with the market. They cut
the feet of their own Pakistani brethren. If one Pakistani
exporter was supplying Basmati rice at the rate of $600 per
tonne, the other offered it at a much lesser price. They entered
into contracts for one type of rice and supplied the other one
or wriggled out of the contractual obligations. Both the
importers and consumers, therefore, lost their trust in the
Pakistani exporters.
The fact is that Pakistan has been losing Basmati market except
with small fluctuations, to India and in most of the Middle East
markets, it is still giving up to India which hardly mattered in
any counting during the 70s. India entered in the market with
aggressive marketing strategies and grabbed the Pakistani
Basmati market.
The Pakistan Government and exporters realised the need to take
measures to salvage the situation. Hence, the Rice Exporters
Association of Pakistan was formed years back and assigned the
task to stem the downfall of rice export. Similarly, Bench Mark
System was introduced to check outflow of inferior rice to the
world market. The measures showed some positive impact, yet more
aggressive strategy needs to be applied in a bid to make
Pakistan competitive in the world market.
The urgently required steps include: Branding and packaging:
There were few brands of Pakistani Basmati. What immediately
requires is that Pakistan should create a large variety of
distinctive value-added brands of rice as is the case with
India.
According to unconfirmed market intelligence, a certain quantity
of Pakistani Basmati rice is being imported in the UAE and is
being repacked over there under the Indian brand names, which
subsequently is marketed accordingly. There does exist a
possibility that inferior quality Indian rice is being marketed
as Pakistani rice, and the prime quality Pakistani rice is
retailed as an Indian product.
This all is being done clandestinely. Such practices can only be
eliminated if Pakistan realised the need for branding and
packaging. Rather it would not be a bad idea if Pakistan clamps
a ban on export of basmati rice without proper branding and
packaging. The REAP is the best forum that can educate its
members in this regard. Moreover, the proper branding and
packaging of rice would also help the rice exporters meet
challenges of the fast approaching WTO regime.
The quality-related benchmark measures for export of rice from
Pakistan has definitely produced results but it will take time.
The Government of Pakistan should widely publicise and propagate
for information of the importers as well as consumers of rice.
This will improve the dwindling of Pakistani export image and
may stem the declining tend in exports, particularly exports of
rice.
Aggressive marketing: The essence of Pakistani failure in this
market is the outcome of bad marketing. This drawback needs to
be seriously curbed. Marketing and aggressive marketing is the
call of the moment. Unless Pakistani exporters run after the
importers to sell their products they will not be able to make
any breakthrough. This has extensively been pointed out as to
how rival Indian importers have been operating in this market.
Utmost efforts are required to build up the lost credibility in
the market. The Indian exporters are cashing in on their
credibility and fetching extra premium of their goodwill in the
market. This image-rebuilding can be geared up by the leading
exporters of rice.
Research and development: The sector and product specific
research and development has proved instrumental in every
successful model of economy. The need for extensive research,
has been felt here in Pakistan as well. Hence, the REAP must
initiate preparation of market intelligence report and should
extensively monitor world market. The market behaviour/commercial
intelligence would lend support to conclude about consumption of
rice in the Middle East or Europe and continuous vigilance would
determine the future trends towards the demand and consumption
of rice. The consumption of white Basmati, which occupies a
prime position in Pakistan, shall remain relegated to a marginal
consumption. There is strong need to develop a large variety of
brands, which should be introduced in the international markets
by the Pakistani exporters.
The following steps are warranted on war footings: Production of
that type of rice which is required by the consumers.
b) (i)Understanding the buyer's psyche to finalise business
deals.
ii) Confidence-building measures by strict adherence to the
contractual obligations.
iii) Increased interaction with the business partners.
iv) No exports without proper branding and packaging
v) No compromise on price and quality, come what may.
vi) Targeted monitoring of the market for taking timely
decisions enhance the sales quantum up to $1 billion.
(The writer is acting president of Lahore Chamber of Commerce
and Industry - LCCI).
“The finest rice is from Pakistan whatever the
brand name.”
Pakistan is the producer of the world’s finest long grained aromatic basmati rice. Known as Basmati Pak-10, this rice can be obtained in double jute/Hussein bags in different weights & consumer packs of 1 kg.
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