Pakistan Approves Rs15 Billion Aid for Struggling Rice Exporters Amid Global Competition
The Pakistani government has approved a Rs15 billion financial assistance package for rice exporters to counter a sharp decline in exports caused by global oversupply and intense competition from India. Read More: https://theboardroompk.com/pakistan-requests-increased-rice-procurement-from-philippines-in-key-meeting/ This decision, made by the Export Development Board (EDF) under the Ministry of Commerce, aims to restore competitiveness in the sector, which is the country’s second-largest export earner after textiles. The aid will provide subsidies of 9% for basmati rice and 3% for non-basmati on FOB value, effective until June 30, 2026, following directives from the Prime Minister. Challenges Facing Rice Exports Rice exports surged from $2.04 billion in FY2021 to $3.93 billion in FY2024 due to temporary global disruptions, but fell to $3.35 billion in FY2025. In the first half of the current fiscal year, exports dropped by $854 million, with non-basmati rice accounting for $716 million of the decline. India’s return to the market with subsidized basmati at $850–900 per metric ton has widened the price gap against Pakistan’s $1,150–1,275 per metric ton. High domestic paddy prices, financing costs, and stock build up in importing countries have added to liquidity stresses. Pakistan holds an exportable surplus of 4.1 million metric tons, potentially worth $2 billion if issues are addressed. Opposition and Safeguards Despite approval, board members from textiles and other sectors opposed the move, calling it unfair cross-subsidization. They argued for uniform policies and long-term solutions like R&D and technology upgrades instead of short-term subsidies. The Ministry of Commerce is consulting the State Bank, Pakistan Single Window, and Customs for a digital payment system to prevent misuse. A 90-day review will assess impact on supply, demand, and pricing. The EDF’s annual budget has been raised to Rs27.3 billion, with a Rs20 billion federal grant planned. This package addresses a 50% drop in rice exports, which constitutes 60% of Pakistan’s overall $1.4 billion export decline this year.