Pakistan has removed the minimum export price (MEP) on all rice varieties. This decision follows India’s recent move to lift its MEP on rice, signaling a potential shift in the global rice market dynamics.

The removal of the MEP is expected to sustain the volumetric growth of Pakistan’s rice exports into FY25, although earnings from these exports are projected to decline. This policy change comes on the heels of India’s decision to lift its ban on non-basmati white rice exports and introduce a minimum export price of $490 per ton.

Additionally, India removed the 20% export duty on non-basmati white rice and halved the export duties on three other rice categories: “rice in the husk (paddy or rough),” “husked (brown) rice,” and “parboiled rice.”

India’s initial ban on rice exports, imposed on July 20, 2023, was driven by concerns over domestic food security and rising inflation. Irregular monsoon rains had impacted rice production, leading to increased food prices. With global demand for rice surging, India prioritized securing its domestic supply to stabilize prices and maintain social stability.

Globally, the top rice exporters include India, Thailand, and Vietnam. India exports both basmati and non-basmati rice, while Thailand is known for its jasmine rice. Vietnam focuses on white, jasmine, and glutinous rice. Pakistan, a major exporter of basmati rice, ranks as the fourth largest rice exporter globally, with the U.S., Myanmar, and Cambodia also being significant players in the market.

In FY24, Pakistan’s rice production increased by 35% year-on-year, reaching 9.9 million tons. The Indian rice export ban and Pakistan’s higher production allowed the country to export 6.0 million tons of rice, a 62% year-on-year increase from the previous year’s 3.7 million tons. This marked Pakistan’s highest annual rice export, with export values surging to $3.9 billion, an 83% year-on-year increase from $2.1 billion in FY23. In the first two months of FY25, Pakistan’s rice exports totaled 340,703 tons ($465 million), maintaining the same volume as last year but doubling in value due to improved prices.

According to the U.S. Department of Agriculture (USDA), Pakistan’s rice production is expected to remain around 10 million tons. However, analyst Shagufta Irshad of JS Global notes that Pakistan’s export growth may slow down as Indian exporters re-enter the market. The USDA projects Pakistan’s rice export volume will decline to 5.6 million tons in FY25, though the drop could be steeper if India intensifies competition.

Shagufta predicts that Pakistan’s rice export revenue may fall to $3.48 billion in FY25, a 12% year-on-year decline. In a worst-case scenario, if prices drop by 10% and export volume falls to 4 million tons, Pakistan’s export revenue could decrease to between $3.3 billion and $2.4 billion.

This policy change by Pakistan is a strategic move to remain competitive in the global rice market, especially as India resumes its export activities. The coming months will reveal how these shifts impact the global rice trade and Pakistan’s position within it.