EAC silence on Pakistani rice imports fuels anxiety

Anxiety heightened yesterday following the expiry of a preferential regional duty that had been charged on Pakistani rice imports into the country.

The East African Community (EAC) had been expected to table its new official duty to guide rice import trade with the Asian nation by the close of day yesterday amid fears of possible disruptions in trade between the two countries should the regional countries begin charging higher duty on rice imports.

But in a development that is likely to trigger protests among already anxious traders, the EAC failed to give word on the matter.

“No EAC meeting has taken place so there is no verdict yet,” the PS at the EAC Affairs ministry, Mr David Nalo said.

It was not immediately clear when the EAC is likely to call a meeting to discuss the issue despite earlier expectations that it would have called a session last week.

For many years, Kenya and other EAC nations have pegged the common external tariff (CET) on rice imports at 75 per and an extra preferential 35 per cent import duty in line with the provisions of the harmonised community description and coding system.

But this arrangement was due for review on June 30, 2009—explaining the fresh tensions with the Asian nation that is yet to fully recover from an earlier attempt by EAC members to raise the duty charged on rice imports four years ago.

Kenya produces only about a third of its annual rice demand of 250,000 tonnes with a bulk of the shipments to fill the deficit coming from Pakistan alone.

Statistics showed that IRRI-6 rice shipments to Kenya accounted for about 70 per cent of the Pakistan market share while Pakistan is on the other hand the largest importer of Kenyan tea, taking up consignments of the commodity worth about Sh12 billion each year.

Barely a fortnight ago officials both within government circles and the giant Rice Exporters Association of Pakistan (REAP) raised concern over the arrangement and demanded a commitment that their shipments would not be subject to injurious duty charges.

At a meeting with Kenya’s High Commissioner in Islamabad, Ms Mishi Masika Mwatsahu, the exporters through the association chairman Mr Abdul Rahim Janoo, said the impending expiry of the duty structure posed a major challenge to their trade especially coming at a time when the country had just realised a record crop year with some 6.3million tonnes of the commodity being harvested.

Ms Mwatsahu, however, assured the exporters and the Pakistani government that the current CET/duty arrangement on their rice would be continued.

“The Kenyan government is holding talks with the other EAC member countries and hopefully there will be no problem to continue this relaxation,” she told the exporters.

Mr Simon Chacha, the secretary for External Trade, said Kenya had placed a request to the EAC on the CET and import duty issue and was awaiting direction.