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Pakistan and Sri Lanka are locked in a tussle over basmati exports as Islamabad has been unable to fully utilise the 6,000 tonnes shipments quota it has got under a free trade agreement (FTA) with Colombo, trade sources have said.
The tussle has also turned the focus on the inclusion of Indian basmati variety 1121 in the shipments of varieties allowed by Lanka from Pakistan with duty waiver. Trade sources said New Delhi should question the inclusion of the 1121 variety in the list of Pakistan basmati with Colombo.
Delay in shipments clearance
A major reason for Pakistan not utilising its full quota is the delay on Sri Lanka’s part in clearing the fragrant rice’s consignments. The island nation suspects adulteration of the fragrant rice’s exports from Pakistan.
According to Sri Lanka’s Daily Mirror, Pakistan authorities have expressed their dissatisfaction over Colombo delaying the shipments due to its testing procedures. Pakistan authorities contend that their rice consignments are certified by three different organisations, including the certificate of origin.
The Batalagoda Rice Research and Development Centre in Sri Lanka has been clearing the consignments till now but these days the clearance is being delayed beyond, what Pakistan perceives as, a reasonable time.
Two issues
Trade sources said there are two issues for the dispute between these two neighbouring nations. One, Sri Lankan authorities are not convinced about Pakistan’s testing protocols before the fragrant rice sets sail for Colombo. “Sri Lanka has been wanting to know the testing protocol but Pakistan is hesitant to share details,” said a trading source without wishing to identify.
Two, the prices of the fragrant rice exported to Colombo are lower than prevailing global market rates, raising the suspicion of possible adulteration. “This also involves health issues that could be caused by the adulteration,” the sources said.
Currently, the Rice Exporters of Association of Pakistan has fixed a minimum export price of $1,102 a tonne but some of the shipments to Lanka have been dispatched at below $950.
Case for India
On the other hand, trade sources said India has a case to protest against the inclusion of the 1121 variety in the Sri Lanka-Pakistan FTA list. “The 1121 variety is totally Indian. Though Pakistan may call it 1121 Kainat, it is Pusa 1121,” said the trade source.
India should cash in on Pakistan’s tussle with Sri Lanka in the global market, particularly the European Union and the Gulf, to make further headway in these regions, the sources said.
During the first half of the current fiscal, basmati exports from India increased to 2.6 million tonnes (mt) valued at ₹2.61 billion compared with 2.41 mt valued at ₹2.55 billion.
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