Pakistan, Aug. 12 -- The United States' decision to impose heavy tariffs on Indian basmati rice has opened new opportunities for Pakistan to expand its share in the lucrative American rice market. The 50% duty, applied by the Trump administration on Indian goods including basmati rice, has shifted trade flows in Pakistan's favor, offering a significant competitive edge.
Pakistan's basmati rice exports have steadily increased in recent years. According to the Rice Exporters Association of Pakistan, the country exported about 772,725 tons of basmati rice in fiscal year 2024, earning $876.9 million. This marked a substantial rise from the previous year's 595,120 tons worth $650.4 million, with the average export price per ton increasing from $1,092 to $1,134.
From November 2023 to October 2024, the United States accounted for 24% of Pakistan's total basmati rice exports, amounting to 1,519 shipments. Italy followed with 14% and the United Kingdom with 11%, making these three markets consume nearly half of Pakistan's global basmati exports. Pakistan currently exports to over 110 countries, including key markets such as Australia, Saudi Arabia, the UAE, Canada, the Netherlands, and Germany.
Data from the US Department of Agriculture shows that rice imports in the US have risen sharply over the last three decades, increasing from 7% in 1993/94 to more than 25% in 2022/23. Over 60% of these imports are fragrant varieties from Asia, mainly Thailand's jasmine and basmati from India and Pakistan. Although the US produces its own aromatic rice, the quality and fragrance differ from Asian varieties, and imports are expected to grow further in coming years.
The tariff dispute began as part of US measures to pressure India over its trade and energy ties with Russia. Several Indian exports, including basmati rice, pharmaceuticals, and electronics, faced steep duties. While some products later received exemptions, basmati rice remained subject to the full 50% tariff. In contrast, Pakistani basmati still carries only a 19% duty, giving it a notable price advantage in the US market.
Indian media reports suggest the higher tariffs could cut India's basmati exports to the US by 50-80%, pushing prices up to around $1,800 per metric ton. Pakistani basmati, priced near $1,450 per ton, offers a more competitive option for American importers and retailers, many of whom already report growing interest in Pakistani rice. Retailers across the US, including stores in Virginia, say Pakistani basmati is already a popular choice among consumers.
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