KARACHI - The barriers in the shape of Minimum Export Price of rice set by the government has compelled the exporters to search the other way to sale their commodity below the MEP in international market in collusion with the importers, The Nation learnt on Thursday. The government had set $1500 per ton Minimum Export Price of Super Basmati rice and $1300 per ton Basmati rice. As the international prices of basmati rice have tumbled below the MEP benchmark, the Pakistani exporters are getting orders for the export of rice as per the prescribed amount of MEP, but the local exporters are returning the different of international price and MEP to the importers through their clandestine channels, sources told The Nation. Sources said that the Pakistani exporters are returning 200 to 250 dollars per ton to the importers as difference in the MEP price and international market price. This is being done to retain the rice export orders as the government is least bothered to reduce the MEP, said sources. The information gathered from the market insiders disclosed that the prices of rice in international market have declined which created problems for the exporters, especially the small exporters of the country.  A rice exporter confirmed that the MEP imposed by government of rice export is proving hurdle in smooth export of the commodity. Due to barrier of MEP, the rice exporters are concluding the deals below the MEP and buying dollars from open market and remitting back to the buyers through different channels, he said, informing that this was one of the reasons behind increasing value of dollars against Pakistani rupee which has increased the demand of foreign currency in local market. The Pakistani exporters have created equation with the buyers of their commodity under which the Letter of Credit (LC) is opened at the MEP of $1500 and $1300 per ton export of supper basmati and basmati respectively, a leading exporter of rice confirmed, adding the deals are usually done between $1200 to $1250 per ton.  Stating the usage of other channels in deals below MEP, he said that in majority of the cases the Pakistani exporters send the additional amount of $200 to $250 in advance to buyers of their commodity who send the money matching with the MEP of per ton in relevant Pakistani bank. The rice exporters are purchasing $250 per ton from open market which they transferred to buyers, an exporter said, informing that there was over 500 rice exporters are in the country and no one exports rice below the 200 tons. The rice exporters are purchasing dollar in bulk which could be one of the reasons of increasing value of foreign currency over Pakistani rupee on one side and exporters found a way to sale the commodity in international market, an analyst commented. When contacted by The Nation, Vice-Chairman of Rice Exporters Association of Pakistan Abdul Basir confirmed that deals of rice export were being done below the MEP as exporters wanted to sale their stocks of product hurriedly because new crops will arrive in October 2008. The exporters have to pay the debts of banks which could be another reason for export of rice below MEP, he observed. He said India has allowed the non-basmati export which was another pressure for Pakistani product and competition would increase in regional market. The Union of Small and Medium Enterprises (UNISAME) has invited the attention of the ministry of commerce (MoC) to the inability of the rice exporters to export at the minimum export price (MEP) of basmati rice which is much higher than the market price. Meanwhile, President UNISAME Zulfikar Thaver while talking to The Nation demanded removal of MEP on basmati rice. He argued that banks will be in a mess when the new crop comes and the prices will further decrease due to bumper crop of all varieties and it would be considered wise of the ministry of commerce to remove the MEP on basmati rice as well. He said that the buyers are well aware of the prevailing prices due to the networking and are bargaining with the rice exporters of basmati rice who are selling below the MEP and returning the difference through other channels.