Pakistan: rice hoarders cause 100 percent price hike

In spite of the fact that Pakistan is one of the largest rice producing countries, having annual production of more than 5 million tons, it is facing an unprecedented price hike mainly because of unchallenged and unchecked hoarding by profiteers, traders said.

rice, after wheat, is the second largest commodity consumed in the country. Its annual local consumption crosses 2.5 million tons mark and it is considered as poor man's meal. The prices of all varieties of rice, which started soaring in December 2006, have now gone up by 100 percent just within six months, adding extra burden on kitchen cost of the low-income people of the country.

Soon after harvesting of the paddy crop, news of shortage of rice crop in India and Pakistan spread and, in the absence of any scientific crop monitoring system in the country, these reports quickly gained currency, motivating hoarders and speculators to invade markets of this essential commodity across the country.

Sources said that these culprits not only pushed the prices sky high in a very short time but also made helpless those smaller rice exporters who were holding L/Cs for export. It was interesting to note that bigger rice exporters and traders having huge bank finances also joined this marathon of hoarding and manipulated rice supply to the disadvantage of real small and medium size exporters who are considered backbone of the country's exports, they added.

Business Recorder, Reuters