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Govt cuts basmati rice export floor price to $950 per tonne

The government extended export curbs on basmati on 14 October until further notice, triggering protests by farmers and exporters, who said the high floor price made Indian consignments uncompetitive.

NEW DELHI : The Union government has decided to cut the minimum export price (MEP) it set for basmati rice, a person aware of the development said, following complaints by traders that overseas shipments had become unviable.

The government, which imposed a floor price of $1200 a tonne for overseas shipments in August to cool domestic prices, approved a decision to reduce it to $950 a tonne in a meeting late on Monday evening, the person cited above said. The decision is yet to be notified.

The government extended export curbs on basmati on 14 October until further notice, triggering protests by farmers and exporters, who said the high floor price made Indian consignments uncompetitive.

India was losing market share to Pakistan, which also grows the premium rice variety, they said. A top exporters’ body called for a halt in overseas shipments.

Food minister Piyush Goyal, who held consultation with traders, assured industry representatives last month that the government would review the MEP.

Food secretary Sanjeev Chopra on 18 October said the government was actively reviewing the MEP.

The government will take a decision at the “appropriate time” and until then the “current arrangement will continue”, he said then.

India is a leading exporter of the premium aromatic grain, shipping over 4 million tonnes a year, especially to West Asia. Saudi Arabia, the United Arab Emirates, Iraq, Iran and the US are some of the largest importers of Indian basmati.

MEP is a price threshold below which exporters can’t sell to global buyers.

It is imposed to limit exports. India, the world’s biggest rice exporter, has also banned overseas sales of white non-basmati rice and wheat to put a lid on local prices.

Based on representations from rice exporters’ associations that a high minimum export price, technically called freight-on-board value, was adversely impacting trade, an interministerial committee monitoring prices was last month tasked with reviewing the floor price.

The country shipped basmati rice worth over $4.79 billion in 2022-2023, mostly to West Asia and the US.

In the April-August period, India exported nearly 2 million tonnes of basmati rice worth ₹2,200 crore, a 12% jump in value terms.

Shipments slowed down considerably after the MEP was set in August, traders said.

https://www.livemint.com/news/india/union-government-cuts-minimum-export-price-for-basmati-rice-after-complaints-by-traders-aims-to-boost-competitiveness-11698163686701.html QR Code

Published Date: October 24, 2023

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