March 4, 2019: Pakistan produced 7.1 million tons rice during the kharif season of fiscal year 2018-19, higher than the target of 6.9 million tons, according to State Bank of Pakistan (SBP).

However, as compared to the record crop during fiscal year 2017-18, the rice production decreased by 4.4 percent the current fiscal year, according to the Bank’s 1st quarterly report on State of Pakistan's Economy for FY19.

According to the report, while the basmati performance in Punjab was laudable as the estimated crop exceeded the 4 million tons mark, the production in Sindh suffered a contraction of 15.2 percent on a Year-on-year basis, largely due to a contraction in the area under cultivation.

Variety-wise breakdown suggests that the production of basmati has increased in Punjab on the back of an expansion in the area sown due to several factors including improved relative profitability for the rice variety compared to sugarcane and cotton in the previous period; the increasing demand of the commodity in international markets and a general stability in domestic basmati prices.

However, Irri and hybrid varieties in Sindh suffered due to exceptional water shortages and the poor quality of groundwater, resulting in a total area contraction of 17.1 percent compared to FY18.

As domestic rice production exceeds the annual requirement of 3 million tons, major production is left for exports dominated by the non-basmati variety.

Hence, global prices play a dominant role in determining the rice production and domestic prices.

It is worth mentioning here that the overall value-addition of the crop segment in GDP would largely depend on the production of wheat, the largest crop of the year.

The report said that the looming challenges such as increased fertilizer prices, higher cost of borrowing, and, above all, a 35-40 percent decline in water availability in the Rabi 2018-19 season held the potential to adversely affect prospects in this regard.

Moreover, delay in harvesting of sugarcane crop in certain areas will have a significant bearing on the performance of the upcoming wheat crop as the area may not be vacated in time.

(APP)

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