Sources expect water reserves will be fully recharged by the end of the monsoon and irrigation supplies are expected to be normal for the coming season, which should boost prospects for increased growth. The decrease in production is due to continued irrigation problems which are expected to result in a decline in both area and yield. Exports consist of about 75 percent of IRRI rice and 25 percent of Pakistan s famous fragrant Basmati. Rice is Pakistan s second leading source of export earnings. There is no subsidy or tax on rice exports.
Exporters compete in the market for exportable supplies.
Pakistan faces competition from Thailand and Vietnam in the export of coarse rice and from India in the Basmati rice trade. The decrease in production is due to continued irrigation problems which are expected to result in a decline in both area and yield. The impact of this cut is expected to be greater on IRRI crop than on the Basmati crop since IRRI generally is grown in areas that rely heavily on canal irrigation, while Basmati is grown in areas with large scale tubewell irrigation. Thus, experts expect the basmati crop generally will be sown on time despite the water shortage, while the IRRI crop, which mainly is grown in Sindh, will be late. Despite low prices and increasingly vocal complaints from rice producers, the government plays a minor role in the rice market.