Rice Industry Overview and Outlook

RICE | COVID-19 IMPACT & RELIEF MEASURES PACRA IMPACT ☐ Rising input prices and reduced disposable incomes of the farmers impacted negatively during the rice growing season. No major disruption in the Supply Chain and port operations except temporary delays during strict lockdown days. ■ Panic buying and Stock hoarding in anticipation of over consumption led to a declined offtake in 1QFY21. However, the pattern is expected to recover going forward. ■ Export Restrictions by countries where rice consumption is high led to an increased opportunity for Pakistani exporters. Rice Demand is still expected to rise at a global level amid Covid-19 pandemic, since it is still unclear how long the crisis will last. ■ Short term market fundamentals remain robust. However, in the medium term, any shock on production, that could result lower than expected harvest could trigger a price crisis. Likewise, as second wave of Covid-19 pandemic is emerging, demand fueled by panic buying and hoarding could also trigger a price rise. RELIEF MEASURES Financial support to SMEs and the agriculture sector (PKR 100 billion) in the form of power bill deferment, bank lending, as well as subsidies and tax incentives The State Bank of Pakistan (SBP) has responded to the crisis by cutting the policy rate by a cumulative 625 basis points to 7.0 percent SBP provided subsidized loans under the Export Financing Scheme (EFS). Furthermore, an additional period of six months has been allowed to the exporters for meeting the required export performance against financing of EFS/IERS-II for the monitoring period of FY 2019-20 The SBP increased the time for receiving export payment to 270 days from 180 days Farmers are planned to be provided with transplanters and rice harvesters at 50% discount while relief would also be given on the purchase of rice choppers 25 25

View entire presentation