Islamabad [Pakistan] March 19 (ANI) Pakistan's rice export sector witnessed a steep contraction in February, with shipments falling sharply despite the government's financial incentives aimed at supporting exporters.

The decline has raised serious questions about Islamabad's policy approach, with industry stakeholders arguing that the subsidy scheme has failed to strengthen Pakistan's position in international markets. Exporters say the programme has instead contributed to higher domestic prices, making Pakistani rice less competitive globally, as reported by Dawn.

According to Dawn, official data compiled by the Pakistan Bureau of Statistics indicates that total rice exports dropped by 35.38 per cent in February. The downturn occurred even after the government introduced a duty drawback scheme designed to offset local taxes and levies faced by exporters.

The government allocated around PKR 15 billion under the programme, offering a 3 per cent rebate for coarse rice and a 9 per cent rebate for basmati rice exports. Despite these incentives, export performance continued to deteriorate.

Figures from the Pakistan Bureau of Statistics show that basmati rice exports declined by 19.21 per cent in value, while export volumes dropped 27.98 per cent during February. The situation was even worse for coarse rice, where export earnings fell 42.50 per cent, accompanied by a 32.94 per cent decline in quantity shipped abroad.

Industry experts say the subsidy scheme has failed to tackle structural weaknesses within Pakistan's rice sector. A prominent exporter attributed the slump largely to soaring domestic prices and widespread stockpiling, both of which have undermined Pakistan's competitiveness in international markets.

The exporter also pointed out that the country's rice trade has long remained focused on basic commodity exports rather than building globally competitive export businesses. Over the past four decades, many exporters have prioritised meeting targets under the Export Refinance Facility (ERF) instead of investing in efficiency, branding, and market expansion, as highlighted by Dawn.

Another exporter stated that incentives offered at the export stage cannot compensate for weaknesses in agricultural production. Sustainable export growth, he argued, requires stronger farm productivity and reduced input costs for growers. He stated that improvements in seed quality, irrigation systems, fertiliser affordability, and energy costs are essential to boosting competitiveness, as reported by Dawn. (ANI)