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A Comprehensive Report on the Rice Export Business

Exporters: HAROON ABDUL SATTAR. Est. 1972 | Leading Exporter of

Basmati & Coarse Rice from Pakistan.

SS

SUBMITTED

TO

SIR Khurram Shahzad

In fulfillment of Final Project of

INTERNATIONAL MARKETING

BY

H ameed Ullah Khan

Muhammad Umar

Pakistan Institute of Development Economics

Islamabad



Acknowledgments

God Almighty is Worthy of all acknowledgements Whose Grace has no limits. We would like to

thank Mr. Khuram Shehzad course instructor, whose help was instrumental in carrying out this

project.

Special thanks to General Manager HAS RICE for his kind cooperation, guidance and support.

We owe him a great debt of gratitude.

We would also like to express my gratitude to Marketing Manager HAS RICE for being very

cooperative and courteous. I am also greatly indebted to Madam Naila for his help and support.

Finally, keeping the ethics alive, my dedications would always go to My Dear Parents, Family

and Friends.



Executive Summary

The purpose of this report is to analyze the export related intricacies and legal requirements for

export of rice from Pakistan. Pakistan is finds it place among the largest exporters of rice and has

been exporting rice since its inception. The exporter that focus on, is HASRice, Leading

Exporter of Basmati & Coarse Rice from Pakistan

They have been exporting rice since 1972 and gained place among top-notch exporters in

Pakistan. We collected data and subsequently interviewed their JM over telephone so that we

may be apprised of information we sought.



Export Process, Procedure & Documentation

INTRODUCTION

Exporting is merely a selling but when it is selling at home, it does not bother you because

you are in personal contact with a buyer for which you do not need to comply with several

procedural requirements including filling and exchanging of a lot of documents. But the

difference comes when you intend to sell to some one who is thousands of miles away from

you, speaking different language, having different customs, preferences, currency and

import regulations. In order to facilitate trade with other countries, certain sets of rules

have been developed by the trading nations over the centuries, which are normally

followed in foreign trade today. The International Trade is governed by rules made by the

World Trade Organization (WTO). Details on WTO can be obtained from Information

Advisory Centre (IAC) of the EPB.

SELECTION OF A PRODUCT

If you want to enter export trade, the first thing you have to do is to decide about the

product, which you intend to trade.

OPENING OF AN OFFICE

After selection of product, you may open an office, give it a name, print letterheads, install

phone and fix a signboard on your business premises.

REGISTRATION FOR EXPORT

Previously it was mandatory to register your firm as an exporter for-five years from the

nearest office of the EPB against payment of nominal fee

SELECTION OF MARKET

The exporter cannot go to every country in the world to persuade people to buy his

product.

QUOTING A PRICE

It is easy to quote price at home. For this one has just to calculate cost of production with packing and transportation charges and add profit. But in case of export, quoting of price

means many things. For this one has to examine several things including the following: -



i. What price to charge to remain competitive abroad?

ii. While calculating prices one has to think about all the cost including, packing,

insurance, credit, agent¶s commission, octroi duties, documentation fee, marking

charges, transportation charges, export duties etc.

iii. For securing good price one has also to check up price of the same product abroad. If

there is a good mark up in price in foreign market, one should not loose sight of it.

EPB can help you get price information further its trade offices posted abroad.

SIGNING OF A CONTRACT

When prices are accepted then a contract is signed with the firm for supply of goods which

becomes binding on both the buyer & seller. Contract is a document, which normally

contains.

i. Name of exporter

ii. Name of importer

iii. Item of sale

iv. Unit price

v. Total quantity

vi. Terms of delivery (FOB, C&F, CIF etc.)

TERMS OF DELIVERY

When the exporter is making an offer, he quotes the price of his product. If the offer is

accepted then a contract is signed between the buyer & the seller. The contract includes

terms and conditions under which goods are delivered.

Export Process Flow, Procedure & Documentation Policy & Planning

The buyer sitting in the overseas market is normally not interested to receive charge of

goods at one's factory site but he may be interested to get charge of goods on FOB basis

which means free on Board at airport or seaport. It means that charges of the consignment

are fully paid up to that point and the rest of the freight is paid by the buyer. Terms of

Delivery are not only important for quoting price but it also makes clear as to who is

Responsible for the goods if anything goes wrong. The most frequently used terms of

Delivery are as under: -



FINANCING FOR EXPORT

The exporter should accept order, which he can fulfil easily. He should have the necessary

PACKING

Packing should be sea, air and roadworthy. The container should be in a position to carry

contents to the destination in perfect condition. For reduction in cost most economical

packing material be used. Pakistan Packing Institute can help you.

TRANSPORT

Light and costly items are normally sent by air whereas as heavy items are shipped by sea.

In each case the most economical mode should be used to reduce cost.

INSURANCE

Insurance is necessary to recover cost in case of loss. But where the exporters are sure

that the chances of loss are minimum they do not insure consignment. In case the buyer

insists on Insurance then it must be done.

DOCUMENTATION

The following documents are normally used in exports: -

1. E-Form (Through authorized Commercial Bank).

2. Shipping Bill (Through authorized Clearing agents).

3. B/L or AWB (Through clearing agents)

4. Commercial Invoice

5. Packing List

6. Certificate Country of origin (Through Chamber) or

6(a) GSP (Through EPB)

7. Textile quota Export license/visa document required for textile items under quota

Restraint

8. Pre-shipment certificate through EPB for certain textile item s for exports to

Management textile item.

9. Export contract registration details



POST SHIPMENT DOCUMENTS

1. Textile quota Export license/visa document required for textile items under quota

Restraint 4th copy of shipping (through customs) bill to be used for rebates on

Bank/sales tax refund/textile quota.

2. BCA (Bank Credit Advice) to be received from commercial banks after foreign exchange

is received. The BCA is considered proof for the purpose of rebates, refinance scheme

etc.



HASRice

HAROON ABDUL SATTAR, Est. 1972 Leading Exporter of Basmati & Coarse Rice from

Pakistan.

A brief Introduction

When you want to work with the finest coarse white rice exporters and basmati rice exporters in

Pakistan, HAS Rice Pakistan answers the call. Not only will you benefit from using experienced

rice exporters from Pakistan, your requirements & shipments of Pakistan rice is backed by

consistent quality and regular supply round the year. That gives you the competitive edge and

dominance over other rice importers & competitors in your region.

HAS Rice Pakistan places itself as a leading bulk volume supplier of all varieties of Pakistani

Rice, with major distribution points at major sea-ports world-wide. We are known as quality rice

suppliers with competitive prices. To give maximum benefits to our esteemed customers, we

have adopted a policy of high volume business on low profit.

Relying on years of experience, HAS Rice Pakistan as your rice exporter makes importing

quality rice process quite simple, guiding you through every step. Review our current prices for

all varieties of Pakistan rice and contact us for a free sample today

OUR VISION

"T he vision of H as Rice Pakistan is to become a

global rice company which seeks to take lead in

providing the finest and high quality of Pakistan

rice to its customers worldwide. For centuries, the

quality and purity of the rice has been

questionable. HAS Rice Pakistan aims to take lead

in exporting high volumes of finest basmati riceand white rice from Pakistan to satisfy an

increasing demand of rice consumers worldwide."



M/S Haroon Abdul Sattar (HAS) was founded by Mr. Haroon Abdul Sattar in 1969. The name of

the firm was based on the goodwill and reputation Mr. Haroon had earned initially dealing as a

commodity trader and speculator.

Initially, HAS had a swift start with imports of commodities such as spices, cloves, cardamom,

beetle nuts, cashew nuts, cassia and rubber to cater local market. Since 1980s, HAS owns major

stakes in the local industry and is considered highly renowned and reputed for its quality

products and commitments, HAS has now turned into one of the leading commodity trading

houses of Pakistan.

In early 2001, utilizing the experience spread over four decades, HAS decided to discover new

horizons by expanding its operations in commodity trading and exports to major International

Markets.The year 2004 saw the evolutionary inception of quality Basmati Rice exports by HAS

to its consumers worldwide. During its first year, HAS accounted for trade of more than 195000

number of bagged rice. Coming years saw phenomenal multi-fold rise in this number. With

increased demand, the consumption curve for HAS products is on an upward incline with major

importing countries belonging from Middle East and Europe.

As time ambled away, HAS has not only matured but also grown stronger with changing group

dynamics and traditional values to become a benchmark for quality products it deals in.

HAS Rice Processing Unit is situated in Karachi with state of the art technology and machinery

used to process cargoes from initial stages of procurement till the final stages of packing and

loading. Rice delivered by HAS is top quality, well-cleaned, textured, graded and inspected by

our highly experienced Quality Assurance unit to make sure that quality is not compromised at

any stage of the process.

HAS believes in staunch emphasis for investment in Research & Development in regards to

technology and process development that are similar to standards followed anywhere in the



world.Today, HAS is proudly supported by its world wide customer base and is growing

everyday by the sheer power of experience it holds. With a promise to deliver only premium

quality products, we offer a host of different quality rice brands and packs ranging from 1kg to

100kg.

WHY US

As market places get increasingly competitive, it is natural for companies to look at more value-

added, more cost-effective product offerings. HASRice is able to leverage its following strengths

to offer an unmatched value proposition to the Private Label business:

y HASRice has globally-benchmarked quality assurance. HASRice has its own backward-

integrated contract farming for coarse and basmati rice to ensure they meet all regulatory

& food safety issues on pesticides, aflatoxins, etc.

y HASRice has acquired enormous processing/quality/packaging assurance capabilities and

an extremely competitive product & range over the years.

y Costs of Packaging in Pakistan are much lower than in developed markets. With a

reduced, more cost-effective supply chain, HASRice is able to offer even higher cost

savings to private label customers.

y Pakistan already has a well developed pouch & PET packaging as well as canning

industry and it is easy for HASRice to locally source/develop cost-effective packaging,

tailor-made to the Private Label customers' requirements.

Why Rice an Export?

Rice is the second largest staple food crop in Pakistan and is a major export item in agricultural

produces. Rice cultivation in Pakistan is irrigated on Two Million hectares of agriculture land in

Sindh and Punjab Province in Pakistan.

The major part of the rice production in the country consists of 55% irri varieties and 40% of

basmati (aromatic) rice and 5% of other varieties being planted once a year during the months of

May/June and harvested in September to November with maturity time of 4 to 5 months.

Pakistan by virtue of its warm climate grows indicia (long grain) rice with special cooking

textures of starches amylase and amylopactin.

Rice business in Pakistan is in the hands of private sector where about two million metric tons of

rice is exported annually from a total production of about five million metric tons.



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Logistics

HAS RICE Pakistan owns & manages warehouse spread over 20,000 yards within the premises

of busiest port of Pakistan, namely Port Qasim. This strategic warehousing location enables us to

ship out goods at an hour¶s notice and ensures priority loading as soon as the vessel destined for

shipment docks at the bay.

HAS RICE ensures proper transportation, logistics through cargo vessels and containers,

irrespective of seasons, throughout the year. First class shipping lines are used (SAF Marine,

Maersk, APL, PIL) to ensure timely and accurate delivery of goods at destination ports.

Over the period of two decades, HAS RICE has established a strong & reliable network of

acquaintances with several reliable shipping carriers operating from Pakistan due to exports of

rice in very large volumes which is not very common. This enables us to offer cost effective

freight solutions to our buyers by overcoming the different predicaments occurring in the

growing container freight industry.

Private LabellingIf you're looking for a high quality Rice exporter, then we have been for 17

years successfully exporting to countries such as US, EU, Mexico, Canada, Korea, Japan,

Australia, New Zealand and the Middle East. Our clients include Fast Food companies,

wholesalers, packers, distributors, restaurants, large importers, and other supermarket chains.

At HASRice, we enforce strict quality control measures throughout all of our processes and

packaging procedures; we look forward to providing our customers with the highest quality

products that are competitively priced with the very best customer service in the industry.

Pakistan accounts for 21% of the total rice traded in the world market and we have our

procurement centres strategically positioned right next to the growing areas of all the major rice

crop.

HASRice has invested in creating global standards in processing, quality control and R&D in its

operations in Pakistan. Pakistan has a well developed packaging industry also and is one of the

major suppliers of PET and glass packaging materials to world market. HASRice is positioned as

a truly world class, origin based processor and 'ready to retail' rice from HASRice will provide

you with the strategic advantage to improve your market share.

Comment [h1]:



Rice varieties available in Private Labels:

y Super Basmati

y Super Basmati Par-boiled (Sella) Rice

y PK-385 Basmati

y D98 Basmati

y PK-386 Fragrant Non-Basmati Rice

y IRRI ± 6

y Parboiled IRRI-6 Rice

y IRRI ± 9

y Blended Rice

y Brown Rice

Distributors

HAS Rice has exclusive distributors & representatives in the major world markets. The

international rice market is highly competitive and increasingly demanding, these esteemed

organizations form an integral part of our organization in actively establishing our products in

the market and raising confidence amongst the commercial importers for a company with a neat

exporter profile as is the case.

Our professional distributors and representatives work on the daily monitoring of reports from

different importing markets.

For us, an organization that directs its greatest efforts in catering to the export market, the

relationship with our prestigious customers and the buying markets is one of the key factors that

we take special care of.

This way, we have not only developed superior rice products with consistent quality and supply

chain but also a first class commitment towards customer service, through-out the world.

Terminologies must be known in Export Business in Pakistan

Care (Customers Administrative) for Import Export Pakistan

Cost and Freight (CFR) for Import Export Pakistan

Cost, Insurance and Freight (CIF) for Import Export Pakistan

Carriage and Insurance Paid to (CIP) for Import Export Pakistan .



Confirmation of order:

In this step the importer sends the Performa invoice or invoice showing the specification

of the goods for export. e.g.

Product Specification i.e.

Quantity ,Quality

Unit price (from export point of view) etc.

Terms and Conditions relating to the Payments

Mode of the Shipment

Has Rice, upon receiving the order, critically analyses the terms and specifications of the order

e.g. unit price, quality, quantity etc and make further arrangements.

L/C Advising Bank preferred

Has Rice limited always prefers the Letter of credit to be advised through their own

bank, this off course gives them a convenience, over a bank that the company never dealt with.

L/C negotiable in (name of exporter's city and/or country)

This requirement on the sales confirmation insures that the Has Rice will have the convenience

of presenting the documents for negotiation in the exporter's own city and country, instead of in

another city and worse in another country.

Confirmed by Buyer

Has Rice, requires the importer to confirm the sales confirmation, so issued to ensure that the

buyer¶s Purchase Order is correct and that details of the order are what the buyer wants. The

buyer will sign and return the sales confirmation sent to show acceptance

Production:

Upon receiving the Sales confirmation from the buyer that he really want to import the goods,

Has Rice starts production and arrangement of rice in desired quality and quantity,

Export Documents

Generally following are the Exports Documents which are required for the Export of the goods

from Pakistan.



1. Export Form2. Certificate of Export (TDAP)

3. Commercial Invoice

4. Packing List

Form

Form stands for Export form. In Pakistan it is issued by the State Bank of Pakistan. It includes

the following things:

Name and Addresses of the Exporter

Quantity of commodity,

per Unit price and

total amount of exported goods

Certificate of Export (TDAP)

Certificate of Export is issued by the ³Trade Development Authority of Pakistan´ the purpose

of this requirement is to give information to the country government about the exported goods.

This document is issued against a specified fee that is calculated on the basis of exported goods

amount.

Commercial Invoice:

The commercial invoice is a record or evidence of transaction between the exporter and

the importer. It is similar to an ordinary sales invoice, except some entries specific to the export-

import trade are added.

Certification and/or Legalization of Commercial Invoice

The letter of credit (L/C) from certain importing countries, in particular from the Middle East,

requires the certification and/or legalization of the commercial invoice. The legalization, which

is done by The Consulate or The Commercial Section of the Embassy of the importing country,

is to verify that the invoice is correct.

The certification and legalization are most often satisfied with a stamp or a seal on the invoice

and payment of a fee. The processing time may take one week

Signature and/or stamp

The commercial invoice and packing list is signed by the authorities of Has Rice.



Letter of credit

The description of the goods in the commercial invoice must correspond with the description in

the letter of credit

Quantity

Quantity is specified in the letter of credit e.g. 20000 bags rice of containing 2 kg in each. A

tolerance of 5% more or 5% less quantity is permitted by Has Rice provided the total amount

does not exceed the amount of the L/C.

Unit Price

Has Rice has a mechanism that the unit price in the invoice cannot exceed 10% more or 10% less

than the unit price indicated in the L/C. For example, if the L/C unit price is "about US$250", the

unit price in the invoice can be any unit price between US$225 and US$275, provided the total

amount does not exceed the amount of the L/C.

Amount

Has rice arranges to clearly mention in the L/C that the amount must not exceed the amount

permitted by the L/C. with the exemption that the amount of the invoice cannot exceed 10%

more or 10% less than the amount indicated in the L/C. For example, if the L/C amount is

"approximately US$10,000", the amount of invoice can be any amount between US$9,000 and

US$11,000.

Packing List

The packing list is an extension of the commercial invoice. Pack list is prepared very carfully at

the Has Rice limited, because the freight forwarder---reserves the shipping space based on the

gross weight or the measurement shown in the packing list.

Packing mode adopted by Has Rice Mills

Each set is in an inner box and there are two boxes in an export master carton, or a total of

50 cartons for the 100 sets

Each master carton:

Net Weight (N.W.) ..... 20 kgs. (44.1 lbs.)



Gross Weight (G.W.) ..... 23 kgs. (50.7 lbs.)

Measurement (Meas.) ..... 0.113 CBM (4 cft.)

61 cms. x 61 cms. x 30.5 cms.

(2' x 2' x 1')

Shipment of goods

Before the shipments of the rice lots, a comprehensive marine insurance policy is obtained by the

Has Rice limited to cover the unforeseen risks associated with the delivery of the goods. Proof of

insurance coverage is contained in a document known as policy or insurance policy, which is

attached with the original documents

Bills of Lading

Has Rice arranges with the carrier to devise a ³ bill of lading´ which is complete and concrete in

all terms and should include the following

y Name of the shipping company;

y Flag of nationality;

y Shipper's name;

y Order and notify party;

y Description of goods;

y Gross/net/tare weight

References

General Manager

Atique ur Rehman

Ph # 021- 4434323

www.google.com www.Recp.com.pk

www.hasrice.com