CCOP URGED TO EXAMINE FACTORS DISABLING SME RICE EXPORTERS

Cartel throws SME rice exporters out of business
The Nation
January 20, 2014
Our Staff Reporter

Cartel throws SME rice exporters out of business

KARACHI – The Union of Small and Medium Enterprises (Unisame) has invited the attention of the Competitive Commission of Pakistan (CCP) to the non-competitiveness of the small to medium sized (SME) rice exporters due to control of rice export business by the big players. The SME rice exporters are disabled due to non-financing by the commercial banks and hoarding and speculation by the big exporters.
In a statement, Unisame President Zulfikar Thaver said the SME rice exporters are thrown out of business by the big exporters who are operating a cartel from the farms till the exports by obtaining huge pre-shipment finances from the banks and controlling and manipulating the supply chain.
The big exporters have their purchase points in the rural rice growing areas and have contractual arrangements with the millers and start lifting the grains from the millers. The big rice exporters, millers and processors have formed a cartel and have their own brokerage houses and financiers. They even have their own delegations going abroad for selling their brands.
He said it is becoming increasingly difficult for the SME to run rice export business and the rice export business has gradually slipped into the hands of the big exporters. The SME rice exporters have been thrown out of the mainstream with well-planned maneuverings of the big players. The rice exports are in the hands of only about 25 big exporters out of which 5 or so are exporting ship loads and the other 20 who are exporting huge quantities of different varieties of basmati and non basmati rice to global destinations.
The SME rice exporters are unable to stock the rice as they are not enjoying the export refinance facilities from the commercial banks and secondly they are not in a position to procure the goods as they first sell and then buy and by the time they book the order and receive the letter of credit the prices tend to rise and they suffer losses.

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