KARACHI: It seems that financial problems of people related to the rice industry are not going to subside anytime soon.
Clarifications that only select cases will have their loans rolled over or rescheduled means that the blanket relief is unlikely.
“Commercial banks are only accommodating those rice millers, exporters, and rice growers who are having genuine difficulties in repaying their loans,” said the State Bank of Pakistan (SBP) spokesperson.
Rice exporters, millers and growers say that their problems have compounded primarily because rice prices in international market have come down by 30-50% depending on the rice category, which has disturbed the business cycle of the industry.
The government realises the financial problems and the prime minister’s relief package hoped to cushion the blow by allowing them to rollover their loans until June 2016. However, according to rice industry officials, banks are forcing millers to repay their loans according to the original schedule.
In order to facilitate the rice industry, the SBP had coordinated a meeting among the representatives of rice growers, millers and exporters and representatives of banks at Lahore on September 4, 2015.
“The final decision to reschedule loans is to be taken by the individual banks based on the merit of individual case. Some cases might have merit issues and banks might be reluctant to reschedule,” SBP spokesperson said, adding that bankers too had emphasised that only borrowers having genuine difficulties may be accommodated and free-riding would not be allowed.
Realising the issues confronted by the rice industry people in meeting their loan obligations, the banks agreed during the meeting to facilitate borrowers by allowing them rescheduling facilities. Commenting on the drop in international commodity prices, Rice Exporters Association of Pakistan (REAP) Senior Vice Chairman Noman Ahmed Sheikh said, “If this situation persists, the problems of rice industry will only compound in coming months,” said Sheikh.
He said Pakistan had over 500,000 tons of stock of basmati rice only and that was over two years old. “In such a condition, how could millers and exporters buy new rice crop?” he asked.
A leading Karachi-based rice exporter commented, “We can feel the problems of rice growers. They are helpless as they have to sell their crop at the current market rate. They cannot do anything but to bring their crop in the market on time otherwise it will be perished.”
Published in The Express Tribune, October 16th, 2015.
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