Rice is being imported from Pakistan as the MV Bengal Star set sail from Karachi's Port Qasim to Chittagong, carrying 25,000 metric tons of basmati rice. This marks the first direct government-to-government (G2G) trade between Pakistan and Bangladesh since independence in 1971.
It signals a significant shift in bilateral relations as both countries have set a target to achieve $1.2 billion in trade by 2026. The vessel's departure adhered to strict International Maritime Organization guidelines, moving away from the previous reliance on third-party trading routes through Dubai or Singapore.
Analysts project that this direct trade will lead to an 18percent reduction in logistic costs for Bangladesh, saving approximately $47 million annually on agricultural imports. Additionally, Pakistani rice exporters reported a 22 percent increase in production capacity since 2022 to help meet Bangladesh's annual rice deficit of 1.1 million tons.
This exchange of trade is a strategic maneuver for both the countries: Pakistan seeks to diversify its export markets beyond textiles, while Bangladesh aims to tackle food inflation.
Economists note that this rice shipment represents not just a transactional but a rebalancing of trade dependencies for Bangladesh, to protect itself from price fluctuations in ASEAN markets while bolstering its pharmaceutical and IT service exports.
As Bangladesh pursues a triangulated trade strategy to balance relations with India and China, the partnership with Pakistan forms a crucial aspect of this plan, particularly as Pakistan plays a significant role in China's Belt and Road Initiative.
This collaboration may strengthen Bangladesh's negotiating position with India, and shield it from rice price volatility in the region. Moreover, the trade pact offers Pakistan some economic relief, as it faces a $23.6 billion IMF debt, which weighs on its current account deficit.
Senior officials from Bangladesh's business chambers suggest that Pakistani textiles could replace 15 percent China's fabric imports by 2025, potentially saving up to $300 million annually. However, maintaining high-quality standards will be vital to sustain this progress, leading to proposals for a joint blockchain ledger for transparent transactions.
Looking ahead, the proposed rupee-taka currency swap could reshape regional foreign exchange dynamics, while rumors of Bangladesh taking equity stakes in Gwadar Port hint at deeper maritime cooperation. Analysts recommend considering Pakistani sukuk investments and diversifying sourcing from both nations to mitigate risks related to monsoon volatility.
In this new era of trade across the Bay of Bengal, adaptability and strategic foresight will be essential for fostering economic growth and sustainable partnerships in the region, analysts say.
