All India Rice Exporters’ Association seeks PM’s intervention to revoke EU ban on basmati rice

  • All India Rice Exporters’ Association seeks PM’s intervention to revoke EU ban on basmati rice
    EU has issued a notification that residues above 0.01 ppm will not be allowed in the basmati imports after Dec 31, 2017.
    The Dollar Business Bureau  India’s widely appreciated basmati rice may face the closed doors of the EU due to the new regulations that EU has imposed on chemical residues, The All India Rice Exporters Association (AIREA) said on Wednesday. A fungicide named tricyclazole which many farmers use to prevent leaf and neck blast in basmati paddy varieties was banned by EU. For sometime EU had allowed a maximum residue limit (MRL) of 1ppm (parts per million) on the basmati rice that was exported to EU. However, it has issued a notification that residues above 0.01 ppm will not be allowed in the basmati imports after Dec 31, 2017.  Speaking to the media, AIREA President, Vijay Setia said it would not only impact their businesses but also affect the price realisation of about 1.5 million basmati rice growing farmers in India. Presently US and Japan allow basmati rice imports having residues of up to 3ppm  and 10ppm respectively.  The Rice Exporters’ Association President added that while many farmers do not use the chemical much, asking them to change their practices may take around 2 years and if the new rules by the EU are not withdrawn, the Indian farmers could stand to lose their business to Pakistan.  Incidentally, basmati rice grown in Pakistan do not need the use of the chemical fungicide that Indian farmers use and hence stand to gain from the ban on the Indian exports.  India exports 4 million tonnes of basmati rice every year which s valued around Rs 22,000 crore. The country exports 350,000 tonnes of basmati to EU which is valued around Rs 1700 crore. The AIREA has appealed to the Prime Minister to intervene and has also engaged in discussions with the Commerce Ministry to find a way out of the issue.  In a statement to the media,  AIREA said, ‘Pakistan being the other Basmati rice exporter to the EU would gain all the business that India would lose... the effect of this virtual ban would thus be ruinous.’ According to a PTI release, an Indian government delegation is scheduled to visit Brussels on July 12 in order to discuss the new regulations.
  • Rice millers seek exemption

  • Karnal, June 28 The All-India Rice Exporters’ Association (AIREA) and the All-India Rice Millers’ Association (AIRMA) have raised their voice against the proposed 5 per cent GST on branded rice and requested the government to exempt the industryit. Vijay Setia, national president, AIREA, and a member of the AIRMA, said that they had urged the Union Government to elaborate the definition of branded rice as some branded rice varieties were being sold at Rs 35-40, while unbranded varieties were being sold at Rs 80-100. “The Centre is going to implement the uniform tax system, but the state government has been charging 4 per cent market fee. We had a meeting with the Chief Minister over the issue, but nothing has happened,” he said. Under such circumstances, the purpose of the GST, one tax all over India, would get defeated, he said. — TNS
  • Don’t tax branded rice under GST, cut taxes on procurement:

  • Don’t tax branded rice under GST, cut taxes on procurement: Vijay Setia, president, AIREA

    Vijay Setia, president, All Indian Rice Exporters Association (AIREA), spoke on critical issues currently impacting the exporters and millers.

    tax branded rice, GST, GST rule, new GST rules, taxes on procurement, rice procurement, AIREA, rice exporters in India, GST council, GST regime, basmati rice shipment India’s basmati rice exports have seen fluctuations in fortune in the last couple of years because of factors such as slowing down in shipment to Iran. (Image: Reuters) India’s basmati rice exports have seen fluctuations in fortune in the last couple of years because of factors such as slowing down in shipment to Iran, the country’s biggest export destination for aromatic long-grained rice, and delay in settlement in payments from importers. Vijay Setia, president, All Indian Rice Exporters Association (AIREA), spoke to FE’s Sandip Das on critical issues currently impacting the exporters and millers. Edited excerpts: What are the key issues rice exporters and millers would be facing post GST scenario? Although the GST council has recommended 5% taxes on branded rice while exempting the cereals from taxes, we feel that it would make rice sold to economically weaker section costlier. In the current scenario, the processor has to put several information such as name of the company, date of packing etc. as per requirement of weights and measures department and Food Safety and Standards Authority of India on the rice pack. This would make the rice pack as ‘branded’ thus inviting taxes. The next GST council meeting must address the issue as the government has already promised zero tax on rice under GST regime. States with high local taxes such as mandi fees, arthia (commission agents) commission – 2%, rural development cess (2%) etc. on grain trade mostly prevalent in Punjab, Haryana and others. It should be reduced drastically in the post GST roll out. Because of higher taxation, processors or millers are not willing to set up units in these key producing states. You have been pitching for stopping prevalent practice of documents against acceptance (DA) in non-basmati rice exports while in case of basmati rice shipment, DA has been stopped by the commerce ministry. What are the measures AIREA proposes for exporters to follow so that there are no delays in settlement of payment for rice exported? Because of the prevalence of DA, mostly resorted by small sized basmati rice exporters had become a buyers’ market. Often, consignments are not lifted from the port by importers, and thus, the price has to be renegotiated leading to lower realisation. In a fiercely competitive basmati rice exports trade, small players in order to increase the volume of shipment often send rice consignment to importers who use this unsecure credit to their advantage. We feel that because of the practice of DA, the country’s basmati rice shipment has seen a 29% fall to Rs 22,714 crore in FY16, from a record Rs 29,291 crore reported in FY14. However, the volume of basmati exports has risen from 3.7 million tone (MT) to more than 4 MT in the same period. In FY17, despite lower shipment to Iran, our exports declined to around 5% to Rs 21, 605 crore in comparison to previous fiscal. Thus we has urged government to end the practice of DA in exports of non-basmati rice as well. Basmati rice exporters are currently following two modes – cash against document (invoices are delivered to the importer only against payment) and letter of credit (importers instruct their bank to pay exporters as per the specified conditions mentioned in the original documentary credit). These two methods which are followed widely globally.
     
    After a sharp fall in basmati rice exports in the last couple of years, what is the prospects of aromatic rice shipment in the current fiscal? In the current fiscal, the realisation from basmati rice exports are set to increase compared to last few years. We have been looking at new market for shipment of basmati rice. Overall in the current fiscal the outlook for exports is quite bright.
  • Basmati export benefits from ban on DA, exporters seek similar move for non-basmati

  • CHANDIGARH: Basmati, premium rice, has brought back flavour in the export for the domestic companies who are hailing timely payments from overseas buyers after the Indian government banned documents against acceptance (DA) for the commodity in the current marketing season. The exporters are mulling to seek similar DA restriction for export of non-basmati from India in the ensuing marketing season. The practise of DA had tilted the basmati trade in favour of overseas buyers due to rise in defaults, delayed payments and price manipulations that adversely affected domestic companies. The DA allowed export of consignment without settlement of payments. Even though DA has been banned in the last year for export of basmati but the practise is still prevalent in case of export of non basmati from India. "The curb on DA in export of basmati has decreased defaults in the trade and also given control over prices to the domestic exporters," executive director, All India Rice Exporters Association (AIREA) Rajen Sudershan told ET. Sudershan said that the rice exporters lobby is contemplating to seek ban on DA in case of non-basmati from the Indian government. "The move will boost export and also benefit different stakeholders in the rice trade," he said. The rice exporters maintain that the ban on DA had brought benefits to domestic companies as well as farmers who received timely and higher remuneration this time compared to the previous marketing season. "The policy amendment on DA by government has given confidence to exporters who were exploited by buyers once consignments have been delivered," Vijay Sethia past president of AIREA said. Sethia said that the practise of DA allowed buyers to manipulate all companies who were forced to compromise on margins. This year the ban on DA has promoted transaction through Cash against documents and Letter of Credit. "It has lead to better rice realization to exporters and higher remunerations to farmers," Sethia said. The export of basmati this season stood around 3.99 million tonnes till March 2017 compared to 4.4-million tonnes in 2015-16. The Indian basmati export has been affected due to less basmati trade to Iran after the gulf nation introduced price regulation of $850 per tonne on basmati import.