ANALYSIS OF RICE

INDUSTRY OF
PAKISTAN
Submitted by:
Sadaf Wali
Shewani Golani
Maha Faheem
 INTRODUCTI
ON
• Rice is the fourth largest crop of
Pakistan and this sector earns a lot of
foreign exchange for the country.
• Production of rice has significantly
grown in last 5 years and there is an
increase of 3% in growth rate of rice
production in 2020.
• Rice is the major export of Pakistan
following wheat and cotton.
• Pakistan ranks 11 in rice production
countries of the world and ranked 4th in
rice export countries of the world
• Rice contributes 0.6% to the country’s
GDP and 3.1% to the agricultural sector.
INTRODUCTION
• Rice is cultivated over 10% of
total cropped area of Islamic Republic of
Pakistan
• According to ITC, Pakistan exported 4.95
million tons of rice in 2019 which is around
USD 2.3 billion which contributed 10% in
world’s total export.
• The yearly export of 2020 is around USD 2
billion, the overall exports have increased
during this time and particularly it has been
exported to Iran.
RICE PRODUCTION PROCESS:
 GEOGRAPHIC DISTRIBUTION
OF RICE
• The cultivation of rice is very common is many
provinces of Pakistan but the major rice
producing countries are Punjab and Sindh.
• The cultivation of rice in Sindh and Punjab
contribute 90% of the whole rice production.
• Punjab produces 100% of basmati rice which
include super basmati, basmati 370, basmati
pak, basmati 200 and many more because it has
enriched soil and agro-climatic condition.
• Sindh region produces non- basmati rice which
include IR-6, sada hayat, sarshar, shadab, shua-
19 etc.
• Different type of rice are grown in different areas
of the province due to different land
characteristics and water availability.
• The rice is also grown in other provinces of
Pakistan but it’s of lower quality and does not
contribute much in the GDP.
• The varieties of rice in these provinces include
IR-6, GP 5, Kashmir Nafees, Sada Hayat, Sarshar,
Shahkar, Sawat-I etc.
PROVINCIAL PERCENTAGE IN
RICE PRODUCTION:

Most of these crops are grown in the

fertile Sindh and Punjab region with
millions of farmers relying on rice
cultivation as their major source of
employment
RICE EXPORTS OF PAKISTAN:
BASMATI RICE NON-BASMATI RICE
 RICE EXPORTS OF PAKISTAN:
BASMATI AND IRRI

• Basmati Rice trades at almost double the price of non basmati rice.
• A modest growth in foreign exchange earnings are witnessed over the years on
account of restricted share of basmati rice exports.
 COMPETITION PRESENT IN RICE
INDUSTRY
• Due to increasing worldwide
competition, there is a need of in
depth analysis of rice production
and marketing strategies.
• India is the major competitor of
Pakistan in terms of rice exports
and production
• Basmati rice is exported to EU and
other Middle Eastern countries by
Pakistan and India both.
• Recently, India’s export has been
declined in EU due to its standard
on use of pesticides which created
an opportunity for Pakistan.
Therefore, Pakistan’s exports of
Basmati rice have increased in
2020.
 GLOBAL MARKET
• Rice is the stable food of people
around the globe and more than
500mln MTS are produced annually
on a global scale.
• China is the largest producer and
consumer of rice while India is the
largest exporter of Rice and covers
30% of the rice trade.
• Rice has an increasing demand as the
average production and consumption
of rice has grown by 0.6% to 0.9%
from 2016 to 2020.
GLOBAL MARKET

• Rice has an increasing demand as the average production and consumption of rice
has grown by 0.6% to 0.9% from 2016 to 2020.
• There are several varying pattern on year to year basis as in 2017 the production
and consumption grew by 3.2% and 3.3% and then it drops to 0.7% and negative
0.5% in the next year.
• During that period, Nigeria also reduced its import which has a great impact on
global trade pattern.
GLOBAL MARKET

• The average per capita consumption

• Australia ranks highest in the list in of world’s population is 80 kg.
terms of producing rice and produce • The highest rice consumption is in
around 10 MTs tons per hectare countries like Laos, Bangladesh,
• India and Pakistan mark a yield of Cambodia and Vietnam.
almost 4 MTs tons per hectare • Pakistan is ranked on 77th among 155
• Bangladesh’s output exceeds at countries with a per capital
approx. 5MTs per hectare consumption rate of 18 kg.
 GLOBAL MARKET

• The global rice trade volume in 2020 is • The major rice importing countries
43mln MTs. across the globe are EU, Middle East,
• During pandemic of Covid-19, the and African countries, Iran, Iraq, Japan
demand of rice increases due to and Mexico
increasing demand of African Region • China’s imports have declined because
and panic buying. it become self sufficient in rice
• China and Myanmar are also emerging production and also emerged as global
as global rice exporters rice exporter
 PEST-C ANALYSIS

• Weak laws and order • The population of

• As inflation rate • Pakistan faces strong • Due to increasing
situation of Pakistan our country is
had a drastic effect on
is prevalent in competition because of worldwide
increasing day by technology and
rice sector. our country, it competition, there is
day, which increases innovation and they are a need of in depth
• It also create would have an
the demand of rice at a risk of losing their analysis of rice
disturbance in demand effect on rice for future. market share in production and
supply of rice because industry as the • Recent diet trends international market. marketing
of transport strikes prices and cost of claim rice to be • Firms like Engro
strategies.
and late order
raw material will nutritious which EXIMP are also • Pakistan faces huge
shipments.
• The feudal lords also increase. somehow increases investing in modern
competition from
• Interest rate and the demand of rice. technology and
create hurdles for India due to which it
foreign exchange • The popularity of innovation to cover the
many farmers because needs to focus more
Asian cuisine is also market gap.
they have strong rate start on innovation and
increasing in which • REAP which will play a
alliances with political declining which new strategies
rice is a main key role to gain
leaders who make sure have an adverse
ingredient competitiveness
that the stocks of effect on profit. advantage over
influential people are
competitors.
sold first.
MAIN COMPANIES OF THE
INDUSTRY
Overview
Engro EXIMP AgriProducts Ltd is operating in Basmati Rice procurement, processing
and export business.
The business has been growing day by day and has a visionary methodology of being
among the top and driving Basmati rice organizations around the world.
The goal of Engro EXIMP is to foster solid relationship with the farmers who grows
Basmati rice by providing them value addition services and also assist them in the
procurement of superior basmati rice.
The company also give incomparable quality enlisted seed to these cultivators of
Basmati.
Operations
 
Engro EXIMP Agri-products process and export finest Basmati rice and operates on a
massive scale by using modern integrated plants. The area covered for the processing of
rice is 65 acres and the equipment used for this purpose are imported from USA,
Germany, Japan and other countries. The company process rice at a speed of 24 tons per
hour and has the ability to store 66000 tons of clean and dried paddy rice.
 
Capacity
 
The company has the capacity to export 70,000 tons of rice and has the capability to
procure 150,000 tons of paddy.

 
Revenues
 
The revenue generated by the company in this year is 4.7 billion. The business has
recorded a higher revenue than the previous year but still it has been limited due to excess
of capacity. The company has generated a greater revenue this year than the previous year
because India exports have decreased this year due to failure of procurements to meet EU
standards which created an opportunity for Pakistan and has a great impact on its revenue.
 
Market Share
 
The past two years were very difficult for the company as after pandemic it was
recovering from effects of over trading. The market share of the company is small which
less than 5% is but it has the opportunity to increase its market share due to EU restriction
on Indian basmati rice.
 
Technological State:
 
Engro EXIMP recently selected Honeywell UOP and WR grace and company as their
technology partners for USD 1.5 billion. These technologies will help Pakistan to become
self-sufficient in the production of rice and also plays a key role to increase its exports
overtime.
 
Main Products.
 
EEAP produce and export finest basmati and non-basmati rice. Its main product is Onaaj,
which is a premier wholesale rice brand and offers quality, taste and
convenience to customers.
MAIN COMPANIES OF THE
INDUSTRY
Overview

Matco Rice Processing was founded in 1990. It is a leading rice exporter of Pakistan.
It is leading exporter of Rice in basmati sector. The company has expand its market
in 65 countries and their brand Falak have an edge in more than 35 countries
 
Operations
Matco has been operating in four processing and milling plants and provide storage
facilities as well. It is the greatest exporter of rice in Pakistan. Falak rice has been
exported in more than 65 countries.
 
Sales and Capacity
 
The company has the capacity to process 40 MT rice per hours and it has invested
more than USD 25 million in technology and advancement.
Market Share:
The market share of the company is higher in 2020 than last 2 years because its sales
have increased and many opportunities arises this year.
 
Technological State
 
The company uses ERP (Enterprise Resource Planning) system to add value to our
products. This system will help the company to track and keep record of purchases
and suppliers.
 
Sales:
Company’s last year sales is more than 10 billion which is more than previous year.
 
Products
The main products include basmati rice, organic white and brown basmati, rice bran
oil, organic rice glucose, rice protein products and many more.
 
MAIN COMPANIES OF THE
INDUSTRY
Overview
Guards Agri was established in 1989. It is the first company in private sector which has its own
research and development sector. The business has grown dramatically overtime and owns five
divisions. The company has a history of more than 50 years in manufacturing and trading of
variety of products. It not only export its product in Pakistan but also across the globe.
 
Production Capacity
The company has a production capacity of 12.5 tons/hour which has increased overtime.
 
Market Share
The company export rice to 36 countries. It has a great market share in international market
Apart from export, it has a leading market share in national market.

Technological State:
The company uses Hybrid Rice Technology from China. The company signed collaboration
agreement with Yoan Longping High Tech Agricultural Company in 1989 and this
collaboration has strengthen their relationship with passing time.
 
Products
The products of this company include supreme basmati, easy cook Sella, super kernel Sella,
brown rice, Tiber basmati, Guard Awami, Longrain rice. Super Kernel Basmati is famous
among all. Guards Rice procure and process high quality basmati rice and mark great sales in
hyper marts and super marts.
 
Financial Position:
The financial position of the company is strong as it is operating in 36 countries and is able to
expand its market worldwide. It has a leading market share which further strengthen its
position in the market.
 
MAIN COMPANIES OF THE
INDUSTRY
Overview
 
Garibsons (Pvt) Ltd was established in 1976. It is a BRC and Halal certified company. It
is a family owned business which is followed by three generations. Garibsons is the
largest exporter of premium quality rice and deals with more than 100 countries on
international level. The company has 5 processing mills and is leading rice processing and
exporting firm.
 
Revenue:
 
The company’s revenue is around USD 88.07 million. The company has increased its
sales volume overtime.
 
 
Technology
The company has installed Sorex series 90000 which uses CCD technology and
encompasses state of the art optical sensing, data processing and ejector technology. The
company has also installed Distributed Ledger Technology (DLT) for purchasing and
selling rice.
 
Products:
Mughal Rice and Mughal Flour are the most famous Garibsons products which is
available across Pakistan. Mughal Badshah Basmati Rice, Mughal Super Kernel Basmati
Rice, Mughal Pure Basmati Rice are the main brands of Garibsons which is traded
nationally and internationally
 
 ISSUES IN THE INDUSTRY
1. There is lack of awareness regarding
mechanical transplantation, use of
fertilizers, technology and maintenance of
plant which somehow affect yield of rice,
especially basmati.
2. The increased use of low grade technology
result in increased ratio of broken rice
3. Many unregistered seeds are available in
the market at cheaper price which result in
low yield
4. The quality of rice is not checked at different
levels of supply chain which resulted in low
quality
5. Inferior quality seeds are available in the
market which result in less exportable
quality rice
 ISSUES IN THE INDUSTRY
1. There is no pre-shipment check for
exporting rice in our country
2. The major issue faced by the rice industry
is lack of rice processing units, technology
support and awareness among farmers
and exporters to produce and export
quality rice.
3. Farmers mix inferior quality rice with
premium quality rice to increase profit
which somehow leaves bad impression on
the importer.
4. There is lack of provincial agricultural
department to educate and encourage
farmers for production and processing of
good quality rice
5. Paddy dealers are not using any moisture
meter or technology which result in huge
losses
6. No policy framework has been developed
for expansion of area under rice cultivation
SOLUTION TO PROBLEMS
1. Government is taking steps to educate farmers
and to create awareness among them so that
they will know the proper use of fertilizers
and machinery
2. Many companies are investing in high grade
technology to increase quality and efficiency
of rice production
3. There is an increased emphasis on farmers to
use registered quality seeds rather than using
unregistered seeds available at cheaper price
in market
4. There is an emphasis by the government to
check quality of rice before shipment so that
the quality is not compromised in any case
5. Many provincial agricultural department have
been established to educate and encourage
farmers
6. Many policies have been developed for
expansion of area under cultivation
FUTURE OF THE INDUSTRY
GLOBAL RICE TRADE:
1. The rice industry is expected to grow in future. Its
production forecast is at 499.6mln tons in 2021 which
is higher than previous year.
2. Rice is expected to come from US and India and there
is expected decline in Bangladesh and Thailand.
3. The rice production of Pakistan is also expected to
grow in 2021. Global ending stocks is also expected to
grow by 2% in 2021 and coming years.
4. Global rice trade is expected to grow by 3% which is
around 44mln tons which is still less than rice trade of
48mln tons in 2017.
5. The reduction of import by Bangladesh, Nigeria and
Sri-Lanka are the reason behind lower import rate.
6. Another wave of corona may result in panic buying of
rice stock
FUTURE OF THE INDUSTRY
LOCAL RICE TRADE:
1. There will be no ban or restrictions imposed on rice
exports during pandemic .
2. The target set for rice production in next year is
around 7.9 mln MTs.
3. The area under cultivation is also expected to increase
in coming years.
4. Pakistan crossed the mark of 2 billion exports in 2020.
It is expected to reach more than 2.5 billion in 2021
and around 3 billion in 2022.
 RELIEF
MEASURES
1. Financial support of 100 billion is provided to SME’s and
agriculture sector in form of incentives, subsidies, power
bill deferment and bank lending.
2. State bank of Pakistan also provided subsidized loan under
export financing scheme
3. State bank of Pakistan has also increased the time for
receiving export payments from 180 to 270 days
4. Farmers were also given transplanters and rice harvesters
on 50% discounts
5. Reliefs will be provided to farmers on purchase of rice
choppers
6. SBP has also cut policy rate by 625 basis points to 7.0
percent
 CONCLUSION
1. Rice is the most essential cash crop of Pakistan and it caters
both domestic and international demands in which exports
have a higher weightage
2. A small percentage of agricultural land is catered to rice
production which is very hard to believe because it is the 2 nd
biggest source of foreign exchange earning.
3. It is believed that Pakistan has a great potential of exploiting
its rice growing capacity by efficient utilization of its scarce
fertile Land.
4. The rice producers of Pakistan are emphasizing on achieving
a target of 2.5 billion dollars this year. To achieve this target,
they are trying to improve per acre yield and the quality of
rice
5. the government is usually involved in the development and
growth of the rice industry rather than subsidizing it but after
pandemic government has played a key role in providing
subsidies and incentives to the farmers
 RECOMMENDATION
1. Ensure superior quality standards
2. Increase productivity of scarce fertile land
3. Reclamation of Saline Alkaline Soils
4. Adequate supply of Irrigation Water
5. Development of New Rice Varieties
6. Invest in biotechnology
7. Promotion of country’s rice in potential
foreign markets
8. A proper system of disbursement of private
sector credit for Rice exporters is developed
THANK YOU!