KARACHI: As rice prices continue to soar, government departments are avoiding taking responsibility for the current situation and fail to devise a mechanism to bring the prices down.

Rice commissioner says it is not his department which deals with prices and the area is dealt by the joint secretary of the Ministry of Food, Agriculture and Livestock, who shifts the responsibility to the Ministry of Commerce. However, the ministry’s joint secretary says it is a provincial matter.

“It seems that after the flour and rice crisis, the nation will soon be forced to change its staple food and eat potatoes as the situation is worsening and there is lack of willingness on the part of government to control the situation,” said an economist.

He said the purchasing power of people had fallen by 20 per cent due to continuously high inflation, which stood at 22 per cent. There is disparity between prices in the local and international markets and the profiteers are taking benefit of the international shortage of rice at the cost of local consumers.

Another issue is the hoarding and smuggling of rice, which needs to be curbed by the government in order to ensure availability of the commodity in the local market at affordable rates.

According to data, the country produces more than 5 million tonnes of rice and consumes around 2.5 million tonnes and despite a surplus of around 3 million tonnes prices are quite high in the local market, making the commodity out of reach of common people. Though the government had set minimum export price of rice a couple of weeks ago, its prices are still at peak.

Shahid Hassan Siddiqui, an economist, said the government should restructure and adjust its economic policy, adding continuous oil price hike in the international market along with increase in food grain prices globally were the major reasons for inflation in the country.

He was of the view that prices of oil and food grains would not come down to 2005 levels, but the government should restructure its economic policy in a way which could provide relief to common people.

Hoarding and smuggling were the major issues, which did not allow the prices to come down and financing provided by the banks further helped the hoarders and profiteers, he added.

Rice Exporters Association of Pakistan Vice Chairman Abdul Baseer, discussing the high prices, said the minimum export price would not bring down rates in the local market, however “we are trying to control them and in this regard we will soon provide 200,000 tonnes of rice to utility stores. Even if this does not work, we will opt for fair price shops and sell rice to consumers directly at reasonable rates.”

However, he did not disclose at what prices the association would provide the commodity to the utility stores. “This is still to be decided and so far there is no agreed value at which rice will be supplied to the utility stores,” he said.

Wholesalers Market Association Chairman Anis Majeed said the prices of rice after the fixing of MEP had not come down and “are still at high levels.” Irri-6 was sold at Rs46 per kg, Irri-9 at Rs62 per kg, Basmati rose from Rs74 to Rs78 per kg and Super Basmati increased from Rs84 to Rs88 per kg.

He suggested that rice prices could only be controlled if regulatory duty was imposed. “When rumours of a ban on the export of rice were doing rounds, the price of Irri-6 fell to Rs36 and similar was the case with other varieties. However, as soon as the impression came that the government was not banning exports, the prices went up again,” he said.

Another issue is that there is no consensus among exporters and their representative bodies. Some of the exporters are of the view that the government should ban the export of rice at least for 15 to 30 days, which will help the prices to come down.

Another group of exporters says that the export ban will lead to smuggling and deprive the country of foreign exchange. The small and medium-sized exporters have slammed the REAP for promoting ideas like MEP, which they said would not benefit the common man.

Besides all these, one of the exporters said rice export consignments worth millions of dollars had been stuck up at the port for the last five days owing to a ‘confusing order’ issued by the Ministry of Commerce vide its letter dated April 30 No 4(2)/2008. As per clause (b) of the said letter “all export consignments shall be accompanied by a certificate of quality and specifications by the Quality Review Committee of the Trade Development Authority of Pakistan.”

He said the clearing and forwarding agents informed that the Trading Corporation of Pakistan (TCP) was issuing certificates of quality for the export of milled Basmati white rice and Basmati brown rice whereas the Quality Review Committee (QRC), managed by the REAP, was only handling milled Basmati rice consignments. Customs officials had been accepting certificates of the two bodies for rice export since 1999 but due to the recent Ministry of Commerce’s letter, examination of rice export consignments was stopped as there was no Quality Review Committee of TDAP in the country, he added.

The Export Promotion Bureau (EPB), now Trade Development Authority of Pakistan, following a Sindh High Court’s order, had authorised former Rice Exporters Corporation of Pakistan and then the TCP to carry out inspection of rice consignments of those 13 exporters who had filed suit in the court.

The commerce ministry, in its letter, might have mistakenly mentioned Quality Review Committee of TDAP. This has led to the stuck-up of hundreds of containers loaded with rice for shipment to various destinations. Many consignments have missed their designated vessels and have been lying at the port causing heavy demurrage charges as well as financial losses to the rice exporters.

The exporters have urged the Ministry of Commerce and TDAP to immediately intervene and ensure the clearance of stuck-up consignments.