Indian rice exporters are upset by the fact that they are losing out to Pakistan in Basmati trade in the current season. From the past couple of weeks the European traders have bought close to 100,000 tons of Basmati rice from Pakistan.
Indian exporters feel they are facing a daunting task in competing with Pakistan in the price realm as well as in patent rights. One of the senior members of the All India Rice Exporters Association Gurnam Arora blamed higher taxes imposed by the government since April 1 as the major reason. However, he admitted that Indian Basmati was generally $200 higher than its Pakistani version.
The association has already requested the government to immediately bring down the taxes to save the exporters. If the taxes continue to stay, the exports are expected to shrink drastically by 30%.
European importers have opted for Pakistani Basmati particularly due to the price factor. While Indian Basmati quoted $1500 per ton the Pakistani one was available for $1000 per ton. Indian Basmati exports ended last fiscal with 1.5 million tons out of total exports of 5.5 million tons of rice from the country. Pakistan’s currency depreciation against the USD is also seen as another reason for the prices to get slashed sizably against the Indian rice.
Industry experts believe Pakistan’s bumper crop coupled with price competitiveness is likely to cause severe damage to India’s Basmati exports. Most of the rice importers are waiting for the imminent tax cuts before committing any further orders. Arora pointed out the recent terror attacks have also added to the woes of the exporters as most traders are reluctant to visit the country for any trade talks.
It should be noted, India and Pakistan are fighting for patent rights on Basmati for the past two decades especially after RiceTec Inc, a US-based company was granted a controversial patent in 1997 on Basmati rice. Later the patent was revoked as it was challenged strongly by India.