Karachi: Following the government's imposition of an additional 2% tax on exporters, Pakistani rice exporters failed to fetch expected prices in the global market, leading to a significant decline in rice exports during the fiscal year 2025. A key reason behind this has been the rapid drop in international rice prices.
Rafiq Suleman, former Chairman of the Rice Exporters Association of Pakistan (REAP) and Convener of the Rice Committee of the FPCCI, criticized the government's decision to impose the tax. He argued that if policies had been formulated in consultation with REAP leadership, both rice exports and foreign exchange earnings could have increased.
Suleman emphasized the need for a stronger agricultural focus to improve crop yield, advocating for affordable pesticides and seeds for farmers. Despite numerous challenges, he acknowledged the efforts of exporters to sustain rice exports, calling their work commendable.
He identified plant protection issues as a significant factor affecting rice exports this year, resulting in a month-long disruption. As the sector attempts to stabilize, Suleman noted a lack of governmental attention.
Suleman further warned that due to the 2% tax, rice exports might not reach even $3.5 billion next year, with current figures confirming this trend. Rice exports totaled $3.2 billion, and additional taxation could exacerbate the decline. He urged the government to provide cheap electricity, reduce excessive taxes, and offer benefits to exporters to maintain economic momentum.
REAP Chairman Malik Faisal and Senior Vice Chairman Javed Jelani are advocating for exporters, but Suleman stressed that governmental support is crucial.
Statistics reveal a 3.7% decrease in total rice exports to 5.8 million metric tons (MMT) in fiscal year 2025, down from 6 MMT the previous year. Revenue from rice exports dropped 14.7%, from $3.93 billion to $3.36 billion.
The decline in prices, particularly for non-Basmati varieties, which constitute over 85% of Pakistan's rice exports, was a major factor. Basmati rice exports saw a slight 3% volume increase, reaching 797,000 tons, but revenue fell by 5.2% to $832 million from $877 million in FY2024.
A significant reason for the price drop was a 9.1% decline in the average price per kilogram, from PKR 320.8/kg in FY2024 to PKR 291.6/kg in FY2025.
Exports of other rice varieties saw a 4.7% drop in volume and a 17.4% decline in value, reflecting weak demand and price pressure in key markets. Non-Basmati rice exports generated $2.52 billion, down from $3.05 billion in FY2024.
A sharp decline was recorded in June 2025, with exports dropping 40.6% compared to May and 37.1% compared to June 2024. Monthly export revenue fell to $150 million, a 50% year-on-year and 37.4% month-on-month decrease.
In FY2025, rice's share of Pakistan's total exports declined to 10.5% from 12.8% the previous year. Despite the revenue drop, the rice sector remains vital to Pakistan's exports and foreign exchange earnings.