Pakistan’s rice exports experienced a significant decline of 28% in the first quarter of fiscal year 2025-26, as exporters faced rising costs, currency fluctuations, and inconsistent regulatory policies that eroded the country’s competitiveness in international markets. Official data shows that total rice shipments fell to 712,797 tonnes between July and September, compared to 991,146 tonnes in the same period last year.
The basmati rice segment suffered the steepest drop, plunging 45.5% to 137,066 tonnes from 248,500 tonnes, while non-basmati exports fell 22.1% to 575,731 tonnes from 764,700 tonnes. Analysts suggest that these declines reflect structural and policy-related challenges that have hindered Pakistan’s rice exporters relative to regional competitors, particularly India.
Market observers point to the State Bank of Pakistan’s export financing framework, which has made borrowing for exporters nearly 600 basis points more expensive than in India. This has increased the cost of capital for rice traders and negatively affected price competitiveness. Additionally, a managed appreciation of the Pakistani rupee from Rs284.70 to Rs280.85 per dollar during the harvest period further raised export prices, while India’s gradual rupee depreciation allowed its exporters to maintain a pricing advantage.
Exporters also noted the shift from the Final Tax Regime (FTR) to the Normal Tax Regime (NTR) as a factor squeezing profit margins. Inconsistent enforcement of phytosanitary standards and allegations of harassment by the Federal Investigation Agency (FIA) were cited as additional challenges for traders attempting to comply with export regulations.
According to the Rice Exporters Association of Pakistan (Reap), recent policy moves in India have intensified competitive pressures. India’s removal of the basmati minimum export price, lifting of its export ban, and zero-rating of rice exports have tilted the regional market in favor of Indian exporters. Domestically, weak enforcement of the Commodity Hoarding Act 1977 has allowed stockpiling at the start of the harvest season, driving up local prices and further limiting Pakistan’s export competitiveness.
Reap has urged the Pakistani government to adopt a more consistent border trade policy, introduce export insurance mechanisms, and enforce anti-hoarding measures to stabilize the market. Exporters argue that without targeted interventions, Pakistan risks losing further ground in global rice markets, particularly in the high-value basmati segment.
The decline in rice exports also reflects broader economic challenges, including high production costs, inflationary pressures, and exchange rate volatility, which collectively threaten Pakistan’s position as a leading global rice supplier. Stakeholders emphasize that addressing policy inconsistencies and providing financial support to exporters will be critical to restoring competitiveness and sustaining long-term growth in the sector.
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