"The international demand for Pakistani rice is slack while buyers are attracted by low prices in Vietnam and Thailand," said Noor Mohammad, a dealer with rice exporting firm Ghaffar Corporation.

"Prices are likely to remain stagnant in local markets this month," he said.

He said Pakistan lost its initial advantage in export markets because of higher domestic prices, and now that local prices have dipped international demand is not there.

Dealers said Indonesian buyers have still not opened letters of credit for rice in late December for the supply of 277,000 tonnes IRRI rice.

"Also Pakistan's exports to African states are unlikely to pick up before February," Mohammad added.

An exporter of Basmati rice said orders from the Middle East and Europe were expected in late January.

The US Department of Agriculture has raised its forecast of Pakistan's rice output in 1998/99 to 4.65 million tonnes, from 1997/98 production of 4.3 million tonnes.

But low international demand for Pakistani rice has depressed exports so far, with 652,860 tonnes exported in the July-December period, compared to 776,081 tonnes in the same period last year.

Pakistan exported more than 2.055 million tonnes of rice in 1997/98 (July-June), compared to 1.767 million tonnes the previous year.