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Submitted by:
Muhammad Sabahat-ullah Khan
Executive Summary
Pakistan is the 4th largest producer and 11th largest exporter of
Rice. A handsome amount is earned by foreign exchange revenue for
Pakistan which proves to be competitive for our economy. O u r
achievements in the rice industry have been promising since the
independence of Pakistan. Production has increased by a ratio of 2:1
compared to increase in land. This can be credited to the variety of
seeds present, improved facility for rice production and introduction
of various preventions for rice crop against diseases. Punjab is the
major producer of rice, followed by Sindh. This has also been the
reason that Pakistan was able to stand the global financial recession in
2008 comparatively better than the world, as it opened up new
markets for us to export rice.

The industry has been privatized which tremendously benefited the

economy. New technology was introduced along with the new ideas
related to production of variety of seed and it opened up new
opportunities for employment. The price of rice, and hence the
revenue generated in dependent on the demand and supply. Pakistan
is known for the production of basmati rice internationally, which is
highly demanded too.

International Market

As one of the most important grain Rice is a diet for more than
half of the world’s total population. A symbol of dietary caloric supply
upto 50% for poor people provided by rice in Asia and is, therefore,
good source of food security.. It is also increasingly known as an
important food staple in Africa and Latin America. Human
consumption relies on almost all of the varieties of rice– which
accounts for about 90% of production. Rice variants of low quality and
by-products can be sold for animal feed and is used to manufacture

Approximately 480m Metric Tons (MT) of milled rice is produced

annually. India and China alone almost holds 50% of global rice
consumption and production. Rice thrives in those areas with heavy
rainfall. Cultivation of traditional method involves flooding fields –
termed as paddies, with water.
Domestic Market

Unlike other countries, rice industry in Pakistan functions on market

oriented principles. Government assistance and intervention in the
sector has been extent and limited. The level of prices is observed by the
concept of demand and supply forces. Investment on larger basis
generates from individuals in the private sector while foreign direct
investment is on marginal productivity. Since this far, a total of 107
companies operate in the country with 76 firms having less than 50
employees. Majority of these are headquartered in Lahore, followed by
SWOT Analysis

Strengths: Weaknesses:
1. Mixing of Rice
1. Production increased overtime
2. Technology
2. Variety of rice produced
3. Unbranded
3. Exposure to export markets
4. Lack of Quantity as value addition
4. Availability of labor

Opportunities: Threats:
1. Investment opportunities 1. Water issues
2. High demand 2. Increase in small farmers
3. Feudal Lords
3. Asian cuisine influence 4. Lack of infrastructure in rural areas
4. New diet studies 5. .

 Production Increased Overtime

Agriculture sector is not only provide food to fast growing population of

the country, it also provide raw matter to the industry sector. Even there
have been fluctuation in the production of agriculture due to pest attacks
on crops, climate reasons but on the other hand the production
increased overtime due to agronomic, better irrigation and extensive
policies of governments. 9+*-
Rice which is the main staple food for the country's population because it
is main source of getting calories for the majority of the population. The
reasons of high productions are government support price of Rs. 940 per
40 KG, subsidy on fertilizer of Rs.32 billion as well as timely rain.

 Variety of Rice produced

Pakistan specializes in and is very famous for exporting long and long
grain which is aromatic basmati rice. This quality is exported to UAE,
Australia and European Union. Super Basmati is considered one of the
best around the world by the Agriculture Department of the
Government. Others are:

1) Cargo Rice: (BROWN RICE, HUSKED RICE) is the kind of rice obtained
from the paddy, the only process implemented on it is Husk removal.
This includes whole grain, head rice.

2) Plain or White Rice: is rice obtained from the paddy and it has been
husked, milled resulting in removal of bran layers. This includes whole
grain, head rice.

3) Parboiled Rice: It can be husked and milled rice or husked rice having
been subjected to heat treatment after being soaked in water so that
the starch is fully gelatinized. This is followed by a drying process.

Pakistan produces varieties of rice, the popular

ones being: Basmati:
1) Basmati 2000

Basmati – 385

2) Basmati – 198

3) Super Basmati

4) Basmati 370

5) Kernal

6) Shaheen (

Basmati) Other

Rice Varieties:
1) IRRI – 6

2) IRRI – 9

3) PG

(IRRI) 4)

KS 282

These various varieties cater to various demands in different countries

and because Pakistan produces all these, Pakistan has an edge as it
can cater to demands from various countries and not be dependent
on one quality.

 Exposure to foreign markets (Exports)

The quality of rice which Pakistan grows gives it an edge over
many other countries and helps us export rice. Pakistan is the 4th
largest exporter of rice in the world. There was an indirect subsidy on
tractors and bags of rice recently which helped Pakistan export more.
REAP (rice exporters association of Pakistan) was set up to assist the

 Availability of labor

Pakistan being an agro based economy has an ample supply of

labor. The rice industry being a labor intensive industry has access to all
this labor. Therefore there is a chance of high production.

 Mixing Basmati with Non-Basmati

As we all the issue of instability of pricing of Pakistani products

while exporting to foreign markets. Basmati rice has been mixed with
non-basmati rice which retaking the ability of cooking the rice and
labeled as basmati when it is not 100% basmati rice.

 Technology

Pakistan, although has took the initiative to by using technology in

the rice industry but it’s still far behind the advancement of using it.
The traditional technologies able to cope with the rising demand.. The
rice goes through a process until it’s considered as a finished good. The
rice mills located in Sindh are outdated and that’s China and India had a
lead in the industry due to the up gradation of technology in their
industry. This is also why Pakistan experiences a lot of grains of broken
rice after the final process.
 Unbranded

A major weakness of the Pakistani rice exports is that they sell

without any brand names. This was also highlighted by the Engro BD
manager that despite the major players and high exports the packaging
This has charged a GUARD into the industry and Engro is trying to
change it while trading rice.

This has had a drawback that company quality is different of rice.

When consumers all over the world comes to buy Pakistani exported
goods, they are bound to get a different variety every time which leads
to unconsistency. Because of this the exporters do not even get a good
price for the rice exported.

 Lack of Quantity as value addition

Pakistan exports rice in bulk quantity and rarely in 1kg, 2kg and
5kg packets. Again with the help of Engro and GUARD it has just started
but not on a very large scale. The majority is in bulk. The consequences
of this are that it loses its foreign markets as other countries sell in
every possible quantity.

 Investment Opportunities

There is immense potential for value addition in rice sector in post-

harvest processing through development of storage facilities – Silos,
Parboiled rice processing plant, quality polishing and packaging.
Parboiled rice is one of the most popular rice products in Europe, Saudi
Arabia, South Africa and other regions of the world. It has become
more important not only by the fact of improved nutritional value but
also by the improved cooking and processing properties. Saudi Arabia
and USA are big markets for Basmati parboiled rice where 70%ofthe
total rice demand coming from Saudi Arabia is that of parboiled rice.

 High Demand

Population growth in Pakistan is quite visible. Rice being the 2nd

staple food of Pakistan is required in large quantities. This helps the
industry to produce more with lower prices and provide ample rice for
the entire country.

 Asian cuisine influence:

Asian restaurant and food are gaining popularity all over the world.
Asian recipes rely heavily on rice as their stable ingredient example
Chinese food, porridge, black rice of Valencia. As Asian food becomes
more popular, the demand for rice will also increase.

 New diet studies:

The new diet studies have shown rice to be more nutritious than any
other food. These researches for the health conscious people lead to an
increase in demand for rice, which is again a window of opportunity for
the farmers, promising future stable demand.

 Water issues:

Water wastage is very high in our country. The traditional method of

flood irrigation is still in practice throughout the country which wastes
almost 50 percent of water. Water is needed for rice production. This
wastage of water leads to water logging in some areas, and the other
areas being completely deprived of water, affecting the supply of rice.

 Increase in small farmers

The small farmers are increasing in our country as with succeeding

generations, land gets divided. These small farmers are unable to avail
their credit facilities to purchase seeds, pesticides, fertilizers because of
lack of credibility. Additionally, a large area of land for rice is owned by
feudal employing the farmers as workers or tenants. This uncertain
situation of occupancy neither creates incentive of work nor does attract
capital investment by the farmer or by international investors either.

 Feudal Lords

The existence of feudal lords and their connections with the leading
political parties of Pakistan are a threat as they force up the prices of rice
stock by using influence and making sure their stock is sold before that of
the small farmers. This is a threat as it negatively affects the small
farmers and their supply. The feudal landlords are also in possession f
very large land, and because they do not know the ways of farming,
much of the land is left to waste