Customs data showed that China imported RMB 1.95 billion worth of paddy and rice from Pakistan in the first 10 months of this year, 3.9 times that of the same period last year.
Pakistan is the third largest rice supplier to China. In addition, Pakistan once became China’s largest rice supplier in the first five months of this year.
As China and Pakistan further advance agricultural cooperation, Pakistan’s rice exports to China may increase, according to a report published by China Economic Net.
Zhang Jiegen, an associate researcher at the Center for Pakistan Studies at Fudan University, believes that China’s rice market is open to Pakistan in a way that other countries do not enjoy. “China will provide as much quota as possible to Pakistan in order to promote the healthy development of China-Pakistan trade, but Pakistan’s production capacity cannot keep up.”
Many factors affect rice yield. Ch Muhammad Rafiq, Director of Rice Research Institute Kala Shah Kaku, holds that smog is among the culprits. “When basmati rice is not dried in time, exposure to the air produces aflatoxins. If these factors are excluded, the average yield of crops per acre will increase by 10 to 15 maund (1 maund is about 40kg). ”
In Pakistan, many farmers take rice as a cash crop. They use wheat harvesters to harvest rice due to the lack of specialized rice harvesters. Shamsul Islam Khan believes that the use of inappropriate combine harvesters affects rice yield. “This leads to grain loss and increases breakage rate. When specialized rice harvesters are used, the yield will increase, and the quality of crops will improve.” Agricultural technology limits rice production and has an impact on rice processing. Shamsul Islam Khan said that 40-50pc of rice is broken during processing.
In the first five months of this year, Pakistan once became China’s largest rice supplier. The main reason is that China has relaxed its import restrictions on Pakistani rice in recent years. China has approved seven new Pakistani rice exporters to do business in China. So far, the number of Pakistani rice exporters that have got permission to enter the Chinese market has risen to 53.
China adopts a tariff quota policy for corn, wheat, and rice, levying a one percent tariff on imports within the quota and a 65 percent tariff on imports exceeding the quota. In 2021, import tariff quotas are 9.636 million tonnes for wheat, 7.2 million tonnes for corn and 5.32 million tonnes for rice, including 2.66 million tons of long-grain rice. Guo Jiapeng, a businessman engaged in global rice trade in Hong Kong, said. “Pakistani rice is mainly mixed with domestic rice according to a certain proportion to get the best taste.” As the domestic rice harvest season has started, the arrival price of Pakistani rice in Hong Kong this year fell all the way from the highest $480 per ton to $310 per ton.
China’s per capita consumption of rice has been declining year by year. Guo Jiapeng, based on years of trade experience, concluded that the rice that Chinese people have for staple food is decreasing at the rate of 3.5pc per year, while the rice used for industrial production is increasing at the rate of 5pc. Among them, broken rice for industrial use is not included in the quota, and the tariff levied on Pakistan’s broken rice export to China is 10pc. International sellers have set their sights on this “blue ocean market”.
If the quota is a threshold, the preferences and habits of Chinese consumers determine the export prospect of Pakistani rice. Through more than ten years of experience in the Chinese market, Shamsul Islam Khan believes that the appearance of rice plays a key role in the Chinese market, “Chinese consumers’ preference for milled and polished rice leads to an increase in breakage.”
Aman Ullah Khan, a Pakistani trader who has lived in China for over ten years, said that one reason for the poor sales of Pakistani rice in China is the characteristics of basmati rice. “Cooking basmati rice is demanding. The texture of cooked rice will be affected when it’s cooked in electric cookers, so the sales are not satisfactory in China.”
This has been made possible by the efforts of Chinese and Pakistani rice traders. Badar uz Zaman, Commercial Counsellor of Pakistani Embassy in Beijing, appreciated, “importers have started using e-commerce platforms to sell Pakistani rice, and Pakistani Embassy and Consulates in China have organized several rice related events.”
“Our exporters start to comprehend Chinese taste for rice, participate and exhibit in different exhibitions and trade fairs actively, and learn about packaging requirements for products sold in the Chinese market,” said Badar uz Zaman.
Sino-Pak agricultural cooperation is all-round. Pakistan is eager not only to export its agricultural products to China, but also to bring Chinese investors with capital and technology to improve its agricultural sector. “Chinese technology can be seen everywhere around the world now.” He has been engaged in cooperation with Chinese companies. “We have made new machines by mixing local machines with those imported from China, Thailand and other countries. We have reached an agreement with our Chinese counterparts to cooperate in setting up a rice processing plant,” said Shamsul Islam Khan.
Before Chinese agricultural machines entered Pakistan, high prices kept farmers away and hindered the development of agricultural mechanization. “In the past, the prices of these machines were quite high. For example, color sorter machines from Japan were extraordinarily expensive. Now we import them from China because of lower cost and good rejection quality,” Shamsul Islam Khan said.