Rice exports: insure the trade, not the freight

A Business Recorder article notes that Pakistan shipped 4.29 million metric tons of rice in FY2026, earning USD2.29 billion from those sales. Applying last year's destination mix, its analysis puts about USD836 million, or 36.5 percent of the total, on routes exposed to the Hormuz and Gulf of Aden disruption or the detour via the Cape of Good Hope. Around USD390 million of that flows to buyers that depend directly on Hormuz or Bab el-Mandeb.

Export receipts had already slipped before the latest shipping shock. Volumes fell 26.2 percent from FY2025 and receipts dropped 31.7 percent, while average realisation eased from USD576 to USD534 per metric ton. Non-basmati rice accounted for most of the damage, with its receipts down 42.6 percent to USD1.45 billion, whereas basmati receipts edged up 1.5 percent to USD843 million.

The article argues that a freight subsidy would cost between USD215 million and USD429 million, and would pay on shipments that would have occurred anyway. It proposes instead that EXIM Bank of Pakistan run a six-month Rice Export Continuity Window, backed by a USD200 million pilot with 80 percent cover. A complete fiscal premium buy-down would cost USD3.2 to 4.8 million, a fraction of the subsidy option.