Tehran-Lahore Barter to Brighten Energy, Food Trade Prospects

There are vast potentials in energy and food sectors under the Iran-Pakistan barter trade, says Shahzad Ali Malik, former president of Lahore Chamber of Commerce and Industry. 
The well-known industrialist says his group plans to launch business relations in collaboration with other local companies, The News International reported.
Talking to a select group of journalists on Wednesday, Malik said Iran has been a big market for Pakistani basmati rice, on which India’s supremacy was gradually established due to multiple factors.
Primarily, high cost of production rendered Pakistani rice uncompetitive in Iran against low-cost imports from India. However, due to the better strategy of the current government, favorable competition has become possible for local exporters to trade the best type of basmati rice from Pakistan under the barter framework.
“Rice trade between India and Iran has been on decline lately due to various factors,” he said, adding that negotiations with a local company for the import of LPG from Iran in exchange for rice have reached an advanced stage.
Malik expressed hope that due to barter trade with Iran, Russia and Central Asian states as well as the development of high-yield hybrid rice seed, there was a possibility of boosting Pakistan’s rice exports to $5 billion in the next five years.
He explained that the total export of rice currently stands at around $2.5 billion and with favorable trade policies and the introduction of new varieties of hybrid rice by the private sector, the total trade volume of rice export could double.
Talking about the role of Gard Agricultural Research and Services, he said the local hybrid rice seed production has increased from 10% to 55% in the last 10 years and it is expected to reach 60% next year.
The yield of hybrid non-basmati rice has increased to 100 maunds per acre whereas the production of basmati in Pakistan is also better than India where it is barely 40 to 50 maunds.

Need to Improve Agricultural Output

The industrialist described the steps taken for the improvement of agriculture in the federal budget as a welcome step, under which duty called for alloting land on lease for seed trials to seed research and manufacturing companies at the local level.
Malik said there is a substantial increase in the production of hybrid seeds of various crops, so there is a need to focus on their research and development. It may be noted that Pakistan exports paper and paperboard, rice and stationary products to Iran while it imports LPG, other mineral fuels and electricity from Iran.
The potential for trade between the two countries is immense with the top 20 high potential export items for Pakistan having a potential of $1.9 billion.
According to a report, total annualized demand of LPG in Pakistan is estimated at around 1.5 million tons, of which around 850,000 tons are produced locally, and the balance needs to be imported from neighboring countries.
Local demand of LPG is on increase constantly, while its local production is stagnant. So, with the increase in local demand, import would tend to increase. Pakistan is importing LPG through sea from Middle Eastern countries and land route from Iran.
Malik received the prestigious Sitara-i-Imtiaz (Star of Excellence) Award by the president of Pakistan in 2013, the third-highest decoration given to any civilian in Pakistan, in recognition of his research work in the field of hybrid rice technology for higher and better rice yields in Pakistan.