Dec 14, Colombo: Pakistan's influential and sole rice exporters grouping, Rice Exporters Association of Pakistan (REAP) has urged Sri Lanka to slash import tax slapped on their shipments to Colombo and to double the imports of Pakistani basmati rice.
Chairman of REAP Rafique Suleman meeting with the Minister of Industry and Commerce of Sri Lanka in Colombo on Tuesday pointed out that although rice imported from other countries to Sri Lanka are taxed only Sri Lankan cents 25 per kilo (SL Rs. 0.25) this is not so for rice coming from Pakistan.
Suleman, leading an 11-member delegation of rice exporters told the Minister that many countries around the world are discouraging and stopping their rice exports and Pakistan is the only country in the world that does not restrict its rice exports.
"We, the Pakistani private sector control our country's total rice exports and no controls are imposed by the government on us. The Rice Exporters Association of Pakistan (REAP) has been doing business with Sri Lanka since 1996, supplying to state owned CWE and private sector" Suleman said.
He added that Sri Lanka is imposing higher taxes on Pakistani rice and even the non-Basmati and long grain varieties are taxed at the same rate as Basmati which is taxed at SL Rs. 0.5 (50 cents) per kilo.
The REAP Chairman also urged the Minister to increase the quota of duty-free basmati imports to Sri Lanka, if possible double it to 12000 MT.
Under the Pakistan-Sri Lanka FTA, a mechanism was agreed in 2007 at the First Ministerial meeting between two countries to facilitate the import of basmati rice. Accordingly, a total of 6000 MT Basmati rice per year (on duty free) is allowed to be imported from Pakistan.
Welcoming the REAP's interest to enhance ties with Lankan market Minister Bathiudeen noted that Pakistani rice varieties have been sold in Sri Lankan market for a long time and many of Sri Lankan consumers are familiar with them but expressed reservations on the Pakistani exporters' requests.
"Your demands on import tax and quota issues appear to be reasonable -Still they also impact on bilateral tariff agreements as well as domestic food security and even our local rice farmers' well-being; Therefore I will have to consult all these stakeholders - including my officials, and higher levels before proceeding," the Minister said adding that he will review the issues raised and call for stakeholder consultations next.
In 2016, 3% of all imports from Pakistan to Sri Lanka are Pakistani rice at US $ 9.35 million (declining from $ 12 million in 2015). Rice was the eighth product imported to Sri Lanka from Pakistan in 2016 (number one was cotton, at $ 75 million followed at second by Portland cement at $ 65 million).