Pakistan Rice Exporters Warn of Soaring Shipping Costs After Iran Border Trade Halt

[P]>KARACHI: A leading association of C warned on Sunday that shipping to Iran would be more difficult as tensions in the Middle East push up freight costs, a day after Islamabad temporarily suspended land trade with its neighbouring country over security concerns.

Thousands of containers and trucks were sighted stranded at the Taftan and Gabd‑Rimdan land border crossroads between Iran and Pakistan on Saturday, as commercial activity came to a standstill. A Pakistani official told Arab News that the closure was meant to be a short‑term measure to improve border management and support counter‑terrorism efforts, with limited further detail provided.

Muhammad Raza, chairman of the Rice Exporters Association of Pakistan (REAP), warned that sudden suspensions could create hardships for exporters supplying rice to Iran. The Islamic Republic reported imports of roughly 354 000 tonnes of Pakistani rice valued at US$430.5 million in 2023, according to United Nations trade statistics accessed via the World Bank.

“To divert all traffic to Bandar Abbas [port in Iran] would be impractical because, owing to the ongoing [US‑Iran] war, freight costs are extremely high,” Raza told Arab News.

The conflict, which erupted in February, has driven up freight rates and maritime insurance premiums amid shipping disruptions in the Strait of Hormuz. Iran has effectively closed the strait to most commercial vessels since the outbreak, pushing global oil prices higher.

Pakistan shipped about 5.82 million metric tonnes of rice worth US$3.35 billion worldwide in the 2024‑25 fiscal year, according to the Rice Exporters Association of Pakistan.

Karachi‑based exporter Haroon Abdul Sattar Trading, operating under the name “HAS Rice Pakistan,” stated that its routine land shipments to Iran involve trucks carrying 50 metric tonnes of grain.

“We regularly deliver via the Taftan and Gabd border points,” a company official informed Arab News, noting that HAS Rice Pakistan also ships rice by sea to Bandar Abbas.

The firm offered cost and freight terms for sea shipments to Bandar Abbas, indicating that its pricing encompasses the grain and associated transport expenses required to reach the destination port, per the official.

This pricing structure reflects the broader “Middle East” environment, he added.

Raza indicated it is premature to quantify the exact volume or monetary impact of the Pakistan‑Iran land‑border disruption, though the abrupt shutdown could affect domestic rice prices in Pakistan.

REAP backs the government’s choice to prioritise national security, Raza remarked, cautioning that rapid reversals could result in “substantial losses.”

“We recognise that this border closure may impose temporary difficulties for our exporters and importers alike,” he said.

Total bilateral exports to Iran totalled US$684 million in the 2023‑24 fiscal year, according to the Federation of Pakistan Chambers of Commerce and Industry, which estimated overall trade at roughly US$2.8 billion.

Upon requesting an update, Balochistan government spokesperson Shahid Rind directed Arab News to the federal interior ministry, stating that border decisions rest with the centre.

The interior ministry declined to comment on the queries.

The current disruption follows a brief visit by Raza last October — leading a REAP delegation held a meeting with Iranian Consul General Akbar Eissa Zadeh in Karachi to discuss expanded rice exports and deepening bilateral commerce.

The REAP chairperson highlighted that both parties stressed the importance of sustained trade engagement, citing barter arrangements as a key element.

Even with the temporary stoppage, Raza remained confident that Iran would continue to constitute a major market for Pakistani rice.

“We urge both governments to resolve these issues promptly so that trade can resume,” he concluded.

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