Commerce ministry seeks ₨20 billion budget allocation to reimburse support for rice exporters

The Ministry of Commerce has sought a ₨20 billion budget allocation to reimburse financial support previously extended to rice exporters through the Export Development Fund (EDF), as Pakistan's rice sector faces mounting pressure from lower-priced Indian exports and weakening global demand, Business Recorder reported. 

The Export Development Board (EDB), chaired by the commerce minister, had approved the financial assistance as a temporary measure to support exporters and improve their competitiveness in international markets.

The request comes at a time when Pakistan's rice exports have come under pressure following India's return to global markets. Rice remains Pakistan's second-largest export commodity after textiles and is a major source of foreign exchange earnings, rural employment and agricultural activity.

Pakistan's rice exports increased from $2.04 billion in FY2021 to $3.93 billion in FY2024, benefiting from temporary global supply disruptions. However, exports declined to $3.35 billion in FY2025 as major exporting countries resumed shipments.

The downturn continued during the current fiscal year. During July-December, rice exports fell by approximately $854 million year-on-year. Of this decline, non-basmati rice accounted for $716 million, while basmati rice exports fell by $138 million.

Industry officials attribute the decline to increased global supply, particularly from India, which has re-entered export markets with substantial support measures. According to sector estimates, Indian basmati rice is currently priced at around $850-900 per metric ton, compared with $1,150-1,275 per metric ton for Pakistani basmati.

Exporters have also cited higher domestic paddy prices, elevated financing costs, inventory accumulation in importing countries and regional trade challenges as factors affecting competitiveness and creating liquidity pressures across the rice value chain.

Officials said the assistance was provided as a form of bridge financing through the EDF and is now proposed to be reimbursed through a formal budgetary allocation. The ministry has included the amount under non-employee related expenditure (ERE) in its budget requirements.

To ensure transparency and prevent misuse of the funds, the Ministry of Commerce developed a monitoring mechanism in consultation with the State Bank of Pakistan (SBP), Pakistan Single Window (PSW) and Customs authorities. 

The arrangement was designed to oversee the utilisation of the support package during its three-month implementation period.