Iran Continues to Import Pakistani Rice From Dubai

Iran is buying rice from Pakistan via Dubai despite a preferential trade agreement between Tehran and Islamabad which has been in place since 2006.

The Pakistani newspaper The Nation reported that by eliminating Dubai, the two sides can dramatically increase their bilateral trade from the present volume of less than $800 million per year.

Referring to high consumption of rice in Iran (46 kg per capita), Rice Exporters Association of Pakistan’s Chairman Sameeullah Naeem requested Iran to impose lower duty regime on imports of Pakistani rice in Iran under the PTA.

He was addressing a ceremony, which was also attended by acting consul general of Iran in Lahore, Majid Sadeqi Dolatabadi, and Iran’s former foreign minister, Seyyed Kamal Kharazi.

Naeem called for going forward from PTA to a free trade agreement with preferably a zero import duty regime on both sides.

“We must formulate appropriate trade policy for ensuring sustained trade between the countries,” he added.

The Pakistani official noted that agriculturally-rich Pakistan likes to have bilateral trade ties with oil-rich Iran.

“We both have the right products for each other to trade and mutually coexist, but it is unfortunate that most trade is being done through other countries,” he said.

Referring to banking problems in transferring money between the two sides, the REAP chairman suggested that Iranian banks open branches in Pakistan.

“Bank Melli Iran is interested to open branch in Lahore. For that matter, whatever support is required, we are here to commit that. I ensure that all rice exporters will come up with opening of accounts and routing of all trade documents through this branch only,” he said.

Naeem also announced that REAP is leading a 17-member delegation to Tehran and Mashhad from April 29.

Iran’s former foreign minister, addressing the ceremony, stated that Tehran was working on the proposal of opening bank branches in Pakistan for direct trade transactions in currencies other than the US dollar.

Kharrazi said Tehran was interested in bilateral cooperation in various sectors and was negotiating with Pakistan for reducing duties on bilateral trade.

During a meeting of Pakistan’s National Assembly Standing Committee on Commerce, officials of the Ministry of Commerce and Industry informed that during a recent meeting with an Iranian delegation led by Iranian Foreign Minister Mohammad Javad Zarif, all modalities for opening a banking channel with Tehran have been finalized.

The Iranian top diplomat visited Islamabad last month at the head of a high-ranking politico-economic delegation.

Last year, the State Bank of Pakistan and the Central Bank of Iran signed an agreement on Banking and Payment Arrangement in Tehran with the objective of devising a settlement mechanism to promote bilateral trade.

Iranians consume 3.2 million tons of rice a year while domestic production stands at 2.2 million tons.

More than 1.05 million tons of semi- and wholly-milled rice worth close to $996 million were imported into Iran during the first half of the last Iranian year (March 21-Sept. 22), registering an 84.4% and 108.4% surge in weight and value respectively compared with the corresponding period of last year.

Rice imports accounted for 6% and 4.2% of the volume and value of Iran’s overall imports respectively during the six-month period.

The imports are made mainly from the UAE (reexport), India, Pakistan, Thailand, Turkey and Iraq.

Iran is the largest buyer of India’s basmati and accounts for a fourth of India’s annual aromatic rice shipments of around 4 million tons.

The country restarted rice import registration this year from Jan. 21 until June 21. The permission was communicated by Agriculture Minister Mahmoud Hojjati in a letter to Minister of Industries, Mining and Trade Mohammad Shariatmadari.

According to the letter, the order registrations will be valid for a three-month period and are extendable by a further one month.

Hojjati noted that any rice shipments as per the new orders need to be cleared through Iranian customs by July 22, after which all imports will be banned.

Every year and during the rice harvest season (July-January), the Iranian government bans rice imports in support of local farmers and domestic production.