Prices for long grain milled are priced at or just above $650 pmt, whereas prices in South America are at least $100 pmt below that. South America is in the peak of their harvest season, with several questions swirling around the drought situation in Brazil. We know that Uruguay has crested the high point, and is on the downhill slope of the last 20% of their crop. Argentina is just ahead of them. Brazil and Paraguay are the big swings that will be coming to light in the next few weeks.
In Asia, prices have held steady despite the inflationary rise that so many other commodities have seen. For more than a quarter now, prices in Thailand and Vietnam have oscillated around $400 pmt, while India and Pakistan have been around $360 pmt. This can in large part be attributed to India, who hasn’t slowed exports over the COVID-19 pandemic, and has been responsible for its third record crop in as many years.
India’s farm subsidies, which many speculate have led to their record crop, has blunted the inflationary impacts of rice world-wide. With rice being the most basic food calorie for human consumption that prevents hunger for the poorest nations, this can be viewed as a positive in the global environment. However, India’s rice subsidy violations have put a burden on many rice producers around the globe; these violations were front-and-center this week with the World Trade Organization (WTO).
India has been called out by the U.S. rice industry and others to stop creating an unfair playing field with their rice subsidy program. It is making rice from the United States and other origins uncompetitive on a global scale, and can have severe detrimental impacts on food security world-wide in the future.
Prices on the ground show Texas in the lead at $17/cwt. Louisiana is strong at $15.25/cwt, while prices in Mississippi, Arkansas, and Missouri are fluctuation between $14.75-$15.75 based on variety and qualities.
The weekly USDA Export Sales report shows net sales of 8,300 MT this week, a marketing-year low, down 51% from the previous week and 81% from the prior 4-week average. Increases primarily for Mexico (13,700 MT), Haiti (7,300 MT), Jordan (4,000 MT), the Dominican Republic (2,000 MT), and Honduras (1,500 MT), were offset by reductions primarily for Colombia (22,000 MT).
Exports of 80,300 MT were up noticeably from the previous week and up 98% from the prior 4-week average. The destinations were primarily to Mexico (32,700 MT), Colombia (22,300 MT), Haiti (15,300 MT), El Salvador (4,100 MT), and Canada (2,000 MT).In the futures market, May 22 prices are down just over 1% this week to $16.010. May 23 contracts are about flat from last week, now at $16.615. Average Daily Volume registers at 411, down 23% from last week, while open interest is flat at 9,701.
The rice is being offered under a credit line of $1 billion to Sri Lanka announced by India recently towards the purchase of food, medicine and other essential commodities. Of this credit line, $150 million is earmarked for rice supplies to Sri Lanka.India has commenced shipment of around 40,000 tonne of rice to Sri Lanka to help ease shortage of essential food commodities in the country facing an acute fiscal challenge and economic turmoil. According to B V Krishna Rao, president, Rice Exporters Association, India will provide 0.3 million tonne (mt) of rice to Sri Lanka over the next six months. “All the rice shipments to Sri Lanka will be carried out through ports such as Kakinada, Tuticorin, Chennai and other posts in the southern region,” Rao told FE. The rice is being offered under a credit line of $1 billion to Sri Lanka announced by India recently towards the purchase of food, medicine and other essential commodities. Of this credit line, $150 million is earmarked for rice supplies to Sri Lanka. “As of now, supply of around 40,000 tonne of rice to Sri Lanka has been finalised under the credit line. The first consignment of rice under this framework is expected to arrive in Sri Lanka in the coming days,” according to a statement by the High Commission of India, Colombo. Trade sources said India can ship rice to Sri Lanka within days while for other countries it would at least take a few weeks to export rice. This rice shipment from India is expected to bring down the price of grain in the island nation ahead of Sinhalese New Year, which will be celebrated on April 14. India is also expected to supply other agricultural commodities such as sugar and wheat to Sri Lanka in the coming months. According to a senior official, this assistance in terms of rice shipment is seen as ‘humanitarian measure to help the Sri Lankan people during a difficult time’. Sri Lanka has become a net importer of rice as its production sharply fell after it banned all chemical fertilisers in May 2021 for making the island nation’s agriculture sector to 100% organic cultivation. Following reports of a drop in production of various agricultural commodities because of the banning of fertiliser use, the Sri Lankan government partially lifted a ban on imports of fertiliser and allowed the private sector to import it. India has been the world’s largest rice exporter in the last decade — export earnings stood at a record $8.7 billion in 2020-21 and crossed $9.6 billion in 2021-22. India exported agricultural commodities such as onion, wheat, pulses, basmati rice and processed fruit products worth of $150 million to Sri Lanka in 2020-21.
Higher freight, return of Thailand to international market weigh on supplies from India
Farmers selling below MSP of ₹1,960 a quintal
Drop in pricesThe drop in prices was attributed to stepped up arrivals at mills which resulted in farmers waiting for their turn for two or three days to dispose of the stocks. The initial arrival of crops that were harvested a fortnight ago which were in smaller quantities fetched good prices for farmers. On the other hand, the Food Corporation of India has refused to accept custom milled rice of 2020-21 rabi season after March 31 though the State government wanted the deadline to be extended by two months.
Union Minister of State for Tourism G. Kishan Reddy said that the State government was yet to meet its target of 2020-21 rabi despite several reminders. The Centre will keep its commitment to the State for 2020-21 rabi but not the corresponding season which has triggered the stand-off with the State.
Fortunately, in this decade, synthetic pesticides like dichlorodiphenyltrichloroethane (DDT), endrin, and others entered the market. Another spectacular discovery was that of the high-yielding hybrid wheat and rice. The high-yielding wheat was discovered by Norman Borlaug (Nobel Prize winner) and was rapidly adopted by India largely due to the pioneering work of Dr Swaminathan and MV Rao.Swaminathan is remembered as the ‘father of Green Revolution’ and Rao as the “wheat man of India”. With hybrid varieties and synthetic fertilisers and insecticides, the production of rice per acre increased to 40 quintals from 10 quintals, a tremendous victory in fighting hunger. There were also some setbacks during the 1960s and 70s. India’s budget (read agriculture) is dependent on the monsoon season, as George Curzon pointed out in 1905. Due to drought from 1964-70, India had to import food and became heavily dependent on the United States for wheat supplies under the Public Law 480 agreement. At one time, we were eagerly waiting for the arrival of a ship full of wheat at the Mumbai port. The late former Prime Minister Lal Bahadur Shastri gave a call to “miss a meal” on Monday nights as a part of the Jai Kisan movement. Green Revolution Ultimately, the Green Revolution was initiated. The theme of the initiative was to boost food grains production of rice and wheat using any method and at any cost. Success followed many setbacks. Biologist-turned-science-writer Rachel Carson published a seminal book called Silent Spring, focused on the harmful effects of pesticides, primarily DDT on our health and environment. DDT was found to be non-biodegradable and its remnants were traced everywhere — in our body, soil and water. Studies showed its effects on liver and kidneys, including causing cancers. Scientists rapidly found alternatives and advocated Integrated Pest Management (IPM). IPM is a need-based use of pesticides, alternating crops, intercropping as well as usage of bird perches where birds rest, detect insects on crops and eat them. After DDT, other insecticides like monocrotophos, metasystox, cypermethrin came into use but these are equally harmful to humans, livestock and fish. The “turn to nature” to get pesticide-free food has become a priority. The order of the day is organic farming — natural farming or zero-budget agriculture — which is welcome and most wanted in the agriculture sphere.
Not without setbacksThe first and foremost sound solution is the usage of organic manures from compost, cow dung and ploughing and mulching of leguminous plants. Several plant-based botanical pesticides were discovered. Neem oil, neem kernel extracts, which contain azadirachtin, is the active principle discovered by Germans, the United Kingdom and US. Neem revived the hope of using harmless pesticides but its availability is very low. Several commercial formulations were available in India. Karanj oil (Karanjin active principle), several leaf extracts like Adathoda and garlic-buds aqueous extracts are found to be effective to some extent as active repellants but they cannot replace synthetic pesticide. There is a growing awareness in India to cultivate the crops by natural fertilisers such as cow dung, leguminous green manures, compost, vermicomposting and biopesticides fungi, bacteria and virus-based pesticides like Bacillus thuringiensis, Pseuedomonas aegle, Trichoderma verdi. These bio-pesticides are chiefly produced from diseased insects and soil, among other things. However, it only has limited use on too few fruit and vegetable crops. The problem with the bio-pesticide production is that it is confined to a small industry with no standardisation and doubtful efficacy. Several symposia are held by non-governmental organisations, ideal farmers and governments. Many agricultural magazines hail the miracles of higher yields from organic farming. Particular mention should be made about jeevamrutham — a recently designed concoction called Ramabanam, which gained prominence. These concoctions are made from jaggery, ginger, cow milk, cow curd, cow dung, cow urine, asafoetida. All the ingredients are mixed and fermented for a week, diluted and sprayed on crops. It is claimed that the product can be used as a fertiliser and a pesticide. The farmers who experimented were quick to endorse the products. Their studies on organic farming presented in symposia on organic farming, however, were confined to few vegetables like tomatoes over a limited area. The yield, the farmers said, is high but not quantified with randomised block design studies. The active principle of such concoctions is unknown and doesn’t stand scientific security. Moreover, the cost of these concoctions is as high as pesticides and starting products like cow dung are not available in plenty as of today. For about 90 per cent Indians, rice or wheat are almost exclusively the staple food. So, encouragement of organic farming in a country like India will be meaningful, if applied for rice / wheat. Studies on these crops should also be prioritised. The inconvenient truth, as many farmers put it, is that the land is infertile now without urea in the first few days of rice plantation, and with no application of synthetic pesticides, the entire crop is prone to pests resulting in no yield. The challenge for agriculture scientists is how to maintain the current volume of yield (40 quintals per acre) with organic farming. We need to take with caution some sporadic success stories of organic farming on vegetables and fruits grown in an acre or two. Thus, all the available tools we have with us, like bio-fertilisers, bio-pesticides, green manure and vermicompost, their limitation is discussed herein. Constraints of sustainable organic farming are: None of the organic farming tools are available, especially for organic farming of rice that is the staple food in India. Importantly, the whole organic farming depends on cow dung, which is dwindling even as we are particular about their protection (gosamrakshana). The staple food for cattle is rice straw. While we claim rice production is high and in surplus, the cost of rice remains very high and is not affordable for the poor man. Thus, the increase of cattle population is linked to paddy by rice production. Both are interlinked. Quantification for pesticide residues in food should be done by High Performance Liquid Chromatography / Mass Spectra / Mass Spectra (HPLC / MS / MS) method. The sophisticated method has been adopted by advanced countries but is still not in use in India. The real structure of crop production is dependent on high-yielding hybrid seeds. Continuous research on high yielding varieties by cross breeding with pest resistant wild varieties is essential.
Compost from urban areas and vermicompost, in particular, don’t seem to have been examined for pesticide residues and harmful trace elements such as arsenic, cadmium, mercury and lead is needed by using HPLC /MS / MS method and atomic absorption spectroscopy.Introduction of transgenic varieties is not recommended for organic and natural farming. Therefore, it is wise to use the first three sprays on crops with natural organic materials and the last two sprays with synthetic pesticides. Research on organic farming should be done using robust scientific methods only. Surprisingly, rice was found to contain high pesticides and trace elements. This technique should be standardised in India. Our slogan should be “natural and organic farming with high yields at an affordable price to the common man”. India’s wheat exports surpassed $872 million (2021-22) and rice exports in 2021-22 is likely to surpass the record $10 million, according to the agriculture department of the Government of India.
Two Basmati rice varieties help boost exports, farmers’ income
Both the varieties, developed by the Indian Agricultural Research Institute (IARI), Pusa, Delhi, fetch farmers like Singh financial benefits in the range of Rs 25,000 to Rs 30,000 per acre, after taking into account cost of cultivation as well as lease rental for the land.Pritam Singh, who farms on 110 acres, including some land taken on lease, at Urlana Khurd village of Haryana’s Panipat district, has just sold his harvest of Basmati rice varieties — PB 1121 and PB 1509 — at the local mandi at Rs 3,800 and Rs 3,500 a quintal, respectively. Both the varieties, developed by the Indian Agricultural Research Institute (IARI), Pusa, Delhi, fetch farmers like Singh financial benefits in the range of Rs 25,000 to Rs 30,000 per acre, after taking into account cost of cultivation as well as lease rental for the land. “Since the introduction of high-yielding varieties like PB1121 and PB1509, the production as well as quality in terms of size of the Basmati rice grain increased thus bringing economic benefits to us,” Singh told FE. Singh said prior to the introduction of these two varieties, the yield of traditional varieties was in the range of 12 –13 quintal per acre, while the PB1121 and PB1509 varieties have an average yield of 24 quintal and 26 quintal per acre, respectively. While the high-yielding and larger-grained PB1121 variety was certified as Basmati rice in 2008, the PB1509, which takes fewer weeks for maturity, was released in 2013. Two Basmati rice varieties developed by IARI have contributed 70% of the total value of cumulative exports of long-grain aromatic rice from India worth Rs 2.38 lakh crore between 2010 and 2019, thus bringing benefit to farmers. India exported on an average 3.74 million tonne (mt) of Basmati rice annually during the stated period, of total production of around 5 mt. According to an analysis by IARI of the economic value accrued because of Basmati rice, Rs 1.66 lakh crore worth of export earnings between 2010 and 2019 was from the shipment of PB1121 and PB1509 rice varieties, while domestic sales were to the tune of Rs 51,501 crore in the same period. After deducting the cost of production, the IARI assessment has stated that Rs 1.34 lakh crore has been accrued as earnings to estimated 10 lakh farmers in Punjab, Haryana, Himachal Pradesh, Uttarakhand, parts of Uttar Pradesh and Jammu & Kashmir, who grow two varieties of aromatic and long grained rice. “Improved Basmati varieties have brought prosperity to millions of Basmati farmers by improving their standards of living, better education for children and best health care for family members,” Ashok Kumar Singh, director, IARI, told FE. During 2010-2019, annually, Basmati rice was grown in 18.34 lakh hectares on an average, out of which PB11121 and PB1509 was grown in 67% and 10% of the area, respectively. The rest of the varieties grown by farmers include PB1, PB6 and PB1718, which are also developed by IARI. ajor export destinations of India’s Basmati rice include Saudi Arabia, Iran, Iraq, Yemen and the UAE, besides some European countries. India exported Basmati rice worth Rs 29,849 crore ($4018 million) in 2020-21. Recently, IARI has released improved varieties PB1847, PB1885 and PB1886; these are improved varieties with inbuilt resistance to bacterial blight and blast diseases. “These varieties would reduce the use of pesticides significantly in basmati cultivation,” Ranjith Kumar Ellur, scientist, rice section, division of genetics, IARI, said.
Minister inaugurates harvest of Rakthashali, Jaya and Basmati rice varieties
Of the three varieties cultivated at Kundelattu, Rakthashali with red husk and grain is considered uneconomical compared to some high yielding rice varieties. But the nearly-extinct variety of rice with high medicinal value has properties to cure many ailments. Dr. Sreekanth bought the Rakthashali seeds from Narayanan, a farmer and Basmati seeds from an online marketplace.Kanjikuzhy grama panchayat president Geetha Karthikeyan presided. Grama panchayat vice president M. Santhosh Kumar, agriculture officer Janeesh and others spoke.
MUMBAI, Feb 11 (Reuters) - India's basmati rice exports plunged a fifth from a year ago to the lowest level in four years in 2021 as top buyer Iran slashed purchases after its rupee reserves dwindled, government and industry officials said.
The country's basmati rice exports in 2021 fell 20% from a year ago to 4 million tonnes, the lowest since 2017, according to government data.
Shipments to Iran, the biggest buyer of India's basmati rice, plunged 26% from a year ago to 834,458 tonnes, the data showed.
"Iran wasn't active in the market for a few months last year after its rupee reserves with Indian banks depleted," said a Mumbai-based dealer with a global trading house.
Iran previously had a deal to sell oil to India in exchange for rupees, which it used to import critical goods, including agricultural commodities, but New Delhi stopped buying Tehran's oil in May 2019 after a U.S. sanctions waiver expired.
Tehran continued using its rupees to buy goods from India, but without crude sales, which brought down Iran's rupee reserves. read more
There was slowdown in exports in the middle of 2021 but in the last two-three months buying from Iran, Saudi Arabia and other key buyers have picked up, said Vijay Setia, former president, All India Rice Exporters Association (AIREA).
India, the world's biggest rice exporter, mainly exports non-basmati rice to African countries and premier basmati rice to the Middle East.
The country total rice exports jumped nearly 46% in 2021 from a year ago to a record 21.42 million tonnes as Bangladesh, China and Vietnam increased purchases.
Basmati rice production in 2021 fell around 15% from a year ago because of lower area and untimely rainfall during harvesting season, Setia said.
"Export prices of basmati rice have gone up by 20% because of lower production, but still demand is robust for February and March shipments," Setia said.
‘DMK government keen on supply of quality rice through PDS outlets’
Quality riceThe DMK government had promised to supply quality rice through PDS outlets. It had been decided to set up a state-of-the-art rice mill at Chinnamanur for this purpose. It would procure paddy from farmers and send the rice to ration shops from here directly. This is going to be a reality soon, he said and added that the modern rice mill would come up on an outlay of ₹ 108 crore. For the benefit of the plantain growers, the government had established a cold storage facility. It has a great impact so that they would establish more such facilities in different locations in Theni district including Uthamapalayam, Bodi and Cumbum.
The government strived hard to maintain the storage level in Mullaperiyar reservoir at 142 feet. He recalled the legal battle undertaken by the DMK government and assured the farmers that the Chief Minister M.K. Stalin would not let them down at any cost.The party MLAs Cumbum N Ramakrishnan and Andipatti Maharajan were present. Earlier, Mr Periasami introduced the candidates to the voters. He also addressed meetings at different locations in Theni district.
No diversion of foodgrain from cental pool buffer stock, says Piyush Goyal
Wheat, rice procurementIn a separate reply to a query on the quantum of procurement of wheat, rice, sugarcane and other kharif crops, Ashwini Kumar Choubey, Union Minister of State for Consumer Affairs, Food and Public Distribution, said 433.44 lakh tonnes (lt) of wheat have been procured in 2021-22. Added to this, 601.85 lt of rice and 2996.37 lt of sugarcane have been procured in 2020-21. On the number of farmers benefited from the procurement, he said in the reply that 49.19 lakh wheat farmers got the benefit during the rabi marketing season 2021-22 as against 43.35 lakh farmers in 2020-21. Apart from this, 1.31 crore paddy farmers got the benefit during the kharif marketing season of 2020-21 as against 1.24 crore in 2019-20. To another query, Choubey said 426.98 lt of covered storage (owned and hired) capacity was available with FCI for storage of foodgrains as on on January 1. The stock position of FCI was at 290.46 lt as on January 1. “No food grains got rotted in FCI due to shortage of godowns in the last three years,” he said.
Cotton purchaseReplying to a separate question on whether the Cotton Corporation of India (CCI) had entered the market to purchase cotton, Darshana Jardosh, Union Minister of State for Textiles, said CCI is mandated to procure raw cotton, if prices of raw cotton fall below Minimum Support Price (MSP). “Since market price of raw cotton has been ruling above MSP right from the beginning of the current cotton year, there has been no need for CCI to undertake MSP operations. However, CCI has deployed adequate manpower at procurement centres to keep a close watch on kapas arrivals, market rates, and to meet any eventuality to undertake MSP operations wherever required,” the Minister said. A note in the reply said that seed cotton prices for FAQ grade are ruling much above MSP level since the beginning of current cotton season 2021-22, and farmers are getting higher prices. Thus, farmers do not require market intervention by CCI in current cotton season so far, as they are getting 65 per cent to 70 per cent higher above MSP rates by market forces itself, the note said.
Non-Basmati rice exports likely to cross 17 MT this financial year: BV Rao, president, Rice Exporters Association
-Agriculture Minister, GRDB unawareIndian High Commissioner Dr KJ Srinivasa has said that a large quantity of rice was imported from India during 2021 by local businessmen in order to meet export commitments.
MUMBAI, Jan 17 (Reuters) - Nearly a third of India's rice exports for this month are stuck due to a shortage of freight trains and most traders have stopped signing February export contracts to avoid demurrage charges, industry officials told Reuters.
The slowdown in exports from India, the world's biggest rice exporter, has allowed rival suppliers such as Thailand, Myanmar and Vietnam to increase overseas sales at higher prices.
Slowing exports could force the Indian government to increase procurement from farmers.
Shipments of more than 500,000 tonnes of non-basmati rice that need to be transported to ports on India's east coast from the central state of Chhattisgarh have been stuck due to the shortage of freight trains, dealers said.
They are part of around 1.5 million tonnes of rice that India had planned to export this month.
"Cargoes cannot move from producing centres to ports because of freight train scarcity," said Nitin Gupta, vice president of agricultural commodities trader Olam India's rice business.
"There is no clarity on the availability of trains so nobody is offering fresh cargoes."
Railway authorities have diverted wagons to ship fertilizers and to serve thermal coal power plants to ensure adequate power supply this winter after power plants ran out of coal a few months ago.
The delay in Indian shipments is hitting exporters hard as vessel rates have risen to $30,000 per day and some exporters need to pay as much as $500,000 in demurrage charges, wiping out their entire margin, said Himanshu Agarwal, executive director at Satyam Balajee, India's biggest rice exporter.
Traders have started quoting higher prices for overseas shipments to cover higher demurrage charges, and prices for India's 5% broken parboiled variety of rice have risen to $380 per tonne, the highest in six months.
Higher prices and shipping delays are prompting some buyers to switch to rival suppliers such as Thailand and Myanmar, said B.V. Krishna Rao, president of India's Rice Exporters Association.
Thailand's 5% broken rice prices rose last week to their highest since mid-July 2021 at $404-$405 per tonne.
"We have requested the Ministry of Commerce and Industry to help us by increasing railway wagons' availability," Rao said.
India's Ministry of Commerce and Industry and Ministry of Railways did not immediately respond to requests for comment on Monday.
In the past traders use to switch to road transport in the absence of railway wagons, but truckers have substantially raised freight charges in the past six months after diesel prices jumped to a record high, said a dealer with a global trading firm.
"At least for near-month shipments, Asian and African buyers are switching to Thailand, Myanmar and Pakistan. Indian exports could fall in the March quarter," he said.
India cornered nearly half of global rice shipments in 2021 as its exports surged 45% from 2020 to a record 21.4 million tonnes, or more than the combined exports of the next three largest exporters Thailand, Vietnam and Pakistan, according to provisional government data.
India's rice production has jumped to a record high in the current year and prices are still competitive, but logistics' bottlenecks are limiting exports, said Himanshu of Satyam Balajee.
Export body to give it a makeover to help it face competitors from Southeast AsiaAgricultural and Processed Food Products Export Development Authority (APEDA) Chairman M. Angamuthu has said that the authority has prepared a road map to export organic rice varieties from Andhra Pradesh to meet the growing demand in the European Union, Middle East and East Asia. Mr. Angamuthu told The Hindu here, “Post COVID-19, many countries, including the European Union are looking for rice varieties grown through organic farming methods in India. We have chosen Andhra Pradesh to source such rice for export.” “The APEDA under the Ministry of Commerce and Industry will be the facilitator between the importer and the exporter, and help the latter obtain necessary certification for export. Decks will be cleared for export once organic rice varieties are certified,” said Mr. Angamuthu.
‘Branding needed’“Despite India being a major rice exporter to 170 countries across the globe, Vietnam, Thailand and Philippines remain the prime competitors as India continues to export rice without any key features - branding, promotion and value addition,” explained Mr. Angamuthu. “In a war-footing initiative, a strategy has been prepared to brand the Indian rice varieties with value addition. However, product diversification will be the key strategy to face the challenge from our global competitors,” he added
The senior IAS officer said that the APEDA is all set to groom a group of 100 progressive farmers or Farmers' Producer Organisations from Andhra Pradesh and connect them to the global market to export their respective products including horticulture crops and maize.
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.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.
|The department has also stepped up vigil at TS borders to check illegal transportation of PDS rice to other states. In the 2015-16 Kharif season the department recovered 4,525.701 tonnes of rice from illegal trade but only 1,192 tonnes in the 2016-17 season, said officials.|
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