Determinants of Rice Exports: An Empirical Analysis of Pakistan

Abstract

This study has determined those factors that affect the rice exports of Pakistan. Rice is the 2^nd major staple food of Pakistan after wheat and Pakistan is the 3^rd largest exporter of rice.  Annual time series data for the period 1980-2015 has been used for the purpose of estimations which include 31 observations. All the variables have been used in the log form. For stationarity of data Augmented Dickey-Fuller test has been used. All the variables are stationary at their first difference. Johansen cointegration method has been used to check for long run relationship. Rice production, domestic consumption as a proxy for domestic demand, world’s total rice exports as a proxy for international demand, rough rice yield, domestic price and export price have been used as rice exports determinants. Results suggest that production, yield and international demand are positively significant while export price and domestic price are negatively significant. Domestic demand is insignificant. Vector Error Correction model is used to check long run to short run equilibrium adjustment of the model. VECM shows that model is converging 0.56% annually. At the end it is recommended that Govt. should take necessary steps to improve the yield per hectare and also production of rice in order to increase its exports because these are found to be the most effective determinants.