Rice Industry Overview and Outlook

RICE | LOCAL INDUSTRY Business Risk | Sales Basmati Stiff competition from the Indian basmati exports in the EU and Middle East region and India's strategically strong position in the International Market, being the largest exporter. India's stringent efforts to obtain Geographical Indication (GI) tag from the EU and the probability of removal of Iran restrictions on Indian Rice imports pose a challenge to Pakistan's basmati export. Global Basmati rice has a low concentration with India making almost ~70% of the world. basmati rice production. However, Pakistan's ability to increase its footprint in the International Market remain low due to inefficiencies in its agricultural system and increasing in-house consumption. - Non-Basmati ■ Pakistan's non basmati rice is majorly exported to the African Countries, where the country faces competition majorly from India in terms of crop availability and pricing. Though medium term market fundamentals remain sound, the following business risks have emerged lately: Panic buying and stock hoarding by the Buyers assuming over consumption has caused a Covid-19 lull. 1QFY21 exports fell drastically by ~20% in comparison to the same period last year. Major impact was witnessed in July and Aug, with September closing in better results. Higher production in India makes it more price competitive in the Regional Market thus hampering demand for Pakistan rice. Low Quality Seeds produce less exportable quality rice. *Industry data is derived from 80% of the market share Source: PACRA Database $ PACRA 21 24

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