MICRO ECONOMICS

Ammar Siddique

PRESENTATION BY

Rice

COMMODITY..

Rice Oryza Sativa L. a member of the grass family, along with wheat and corn, is one of the three crops on which the human species

largely subsists. Rice is now one of the most important crops at the global level, as it is used as a staple food in most countries of the world and will continue to be for the foreseeable feature. Rice is intimately involved in the culture as well as the food ways and

economy of many societies. Indica type rice feeds more than two billion people, predominantly in developing countries. In the coming 30 years, the world will require 70% more rice than that it requires today. According to conservative estimates, 800 million tons of rice

will have to be grown with considerate reduction in the input of agrochemical under sustainable conditions. It has been estimated

that half the world's population subsists wholly or partially on rice. Ninety percent of the world crop is grown and consumed in Asia.

American consumption, although increasing, is still only about 11 kg per person annually, as compared with 90–181 kg per person in parts

of Asia.

INTRODUCTION..

According to the most widely accepted theory, rice cultivation originated as early as 10,000 BC in Asia. Archaeological evidence shows that rice was grown in Thailand as early as 4000 BC, and over the centuries spread to China, Japan, and Indonesia. By 400 BC rice was cultivated in the Middle East and Africa. The invading armies of Alexander the Great probably introduced rice to

Greece and nearby Mediterranean countries around 330 BC. Rice was brought to the American

colonies in the early 1600s, and commercial production began in 1685.

HISTORY…

According to survey, Agriculture Sector recorded a growth of 1.2% in 2010-2011, but need support to boost export. The disastrous flood in July 2010 destroyed two major crops, i.e. rice and cotton; this will greatly affect their

yearly growth rate

. According to the Economic Survey 2010-11 launched here Thursday agri-sector has lost significant growth momentum as its growth slowed down to 2.7 percent in the decade of 2000s as against 4.4 percent in 1990s and 5.4 percent in

the 1980s. Major crops remained the victim of natural calamities during the last few years and three out of last four years witnessed negative growth in the major crop

sector.

ECONOMIC SURVEY 2010-11

RICE PRODUCTION

Rice  is  an  essential  cash  crop  and  one  of  the main  export  items  of the  country. 

It  accounts  for  6.4 

percent of value added in agriculture and 1.4 percent in GDP.  

Pakistan grows high quality rice to meet 

both domestic demand and for exports. 

Area sown for rice is estimated at 2883 thousand hectares, 2.7 

percent less than last year.

 The size of the crop is estimated at 6883 thousand tons 1.0 percent less than 

last year. 

In Punjab sugarcane area was also shifted to rice crop, as the growers were discouraged due to 

non‐payment of their dues in time by the sugar mills. 

GLIMPSE ABOUT RICE

WORLD RICE PRODUCTION

BASMATI RICE

Basmati rice is the major type of rice in pakistan. Basmati Rice is a variety of long grain rice grown in India and

Pakistan, notable for its fragrance and delicate, nuanced flavour. Its name means “the fragrant one” “the soft rice,” a”my smile”. Pakistan is the second largest producer and exporter of basmati rice after india. it is primarily grown

through paddy field farming in the Punjab region.

RICE IN PAKISTAN

A number of varieties of basmati rice exist. Traditional types include

Basmati-370,

Basmati-385

Basmati-Ranbirsinghpura(R.S.Pura),

while hybrid basmati varieties include Pusa Basmati 1 (also called ‘Todal’, because the flower has awns). Fragrant rices that are

derived from basmati stock but are not considered true basmati varieties include

PB2 (also called sugandh-2),

PB3

RH-10.

VARIETIES OF BASMATI RICE

PRODUCTION IN PAKISTAN

AREAS OF PRODUCTION

Rice production has decreased from 6,883

thousand tons in 2009-10 to 4,823 thousand tons in

2010-11, showing a decrease of 29.9 percent.

RICE PERCENTAGE

RICE MARKET

Pakistan is losing its rice export market in Iran due to non-availability of banking channels between the two countries.

Meanwhile, Rice Exporters Association of Pakistan (REAP) has demanded of the Ministry of Finance, Commerce and the State Bank of Pakistan to mull over this issue by opening branches of

some Pakistani banks in Iran with an aim to facilitate rice exporters in time to come. Rice exports may decline by the end of this fiscal year due to slowdown in production. The devastating

floods in the country have caused severe damage to the agriculture and cropping sector, said another exporter.

The value of rice exports for the FY11 is likely to decline to $2.3 billion, he said.

It must be mentioned here that the production of rice is estimated to remain 3.5 million metric tons during FY11 compared with last

year’s production level of 6.7 million metric tons.

Long grain white rice

Thai 100% B 590 - 600 ↑

Viet 5% 555 - 565 ↑

Indian 5% NQ↔

Paki 5% 495 - 505 ↔

US 4% 590 - 600 ↓

Uruguay 5% 570 - 580 ↑

Argentina 5%570 - 580 ↑

Long grain parboiled rice

Thai 100% 610 - 620↑

Paki 5% 515 - 525↓

Indian 5% NQ ↔

US 4% 630 - 640↔

Brazil 5% 540 - 550↔

Uruguay 5% 545 - 555↔

PRICE DETERMINATION

Long grain fragrant rice

Thai Hom Mali 100%1035 - 1045

↔ Viet 5% 705 -

715 ↓ Indian basmati

2% 1140 - 1150↔

Paki basmati 2%870 - 880 ↔

Brokens

Thai A1 super480 - 490 ↑

Viet 460 - 470 ↑

Paki 420 - 430 ↔

Indian NQ ↔

Egypt medium grain475 - 485 ↔

US pet food 325 - 335 ↔

Brazil half grain 425 - 435 ↔

Medium grain milled US Cal rose 4% 870 - 880 ↔ Egypt 6% NQ ↔ All prices USD per ton, FOB vessel

SALES TAX CONTRIBUTION

The imposition of 17 percent sales tax on agricultural inputs will add to the troubles of the government as the overall contribution of agriculture sector in GDP growth may decline by 2-3 percent.

According to agricultural experts the tax would affect the overall agricultural productivity of Pakistan. The 17 percent sales tax on agricultural inputs including fertiliser, pesticides, tractors and other inputs would cost the poor growers heavily, analysts maintain.

the contribution of the agriculture sector to GDP growth is 24 percent that may decline to 19-20 percent after this tax is imposed”. Mughal said that with this additional burden of Rs 70-80 billion on the agriculture sector, the total number of people living below the poverty line would increase from 80 million to 110 million.

CONCLUSION..

In Pakistan’s agrarian economy rice plays multifarious roles. Firstly, it is second

staple food and contributes more than 2 million tonnes to our national food

requirement. Secondly, rice industry is an important source of employment and

income for rural people. Thirdly, it contributes in the country’s foreign

exchange exchequer

THANKYOU