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Govt to cut MEP for basmati rice to by 30% to $ 850/tonne.

Exporters said that about 75% of India’s 4.5 million tonne (MT) of basmati rice exports annually are shipped at an average value in the range of $ 700 – $ 1000 a tonne.

India has exported 1.6 million tonne (MT) of basmati rice valued at $ 1.7 billion in the April-July period of the current fiscal, an increase of 13.1% in terms of value compared to the same period previous year. (IE)

The government is likely to reduce the minimum export price (MEP) of basmati rice to $ 850/tonne from $ 1200/tonne imposed in August following a series of consultations with exporters, farmers and state government officials in the key growing states of Punjab, Haryana and Uttar Pradesh.

Sources told FE that a formal announcement is expected in the next couple of days.

During a meeting with basmati rice stakeholders recently, commerce and industry minister Piyush Goyal initially stated that the government would lower the MEP to $900/tonne, however following insistence by the exporters, the minister agreed to lower the duty further, sources said.

Exporters said that about 75% of India’s 4.5 million tonne (MT) of basmati rice exports annually are shipped at an average value in the range of $ 700 – $ 1000 a tonne.

In August, a temporary MEP of $1200/tonne was imposed till October 15 on basmati rice shipment to restrict ‘illegal shipment of white non-basmati rice in the garb of premium basmati rice.’

The commerce ministry had stated that it has received credible field reports regarding misclassification and illegal export of non-basmati white rice whose shipment was banned from July 20,2023.

A committee set up by Agricultural and Processed Food Products Exports Development Authority in collaboration with the agriculture ministry looked into large variations in the contract price of basmati exported in August with the lowest price being $359/tonne against the average export price of $1,214/tonne.

The report had favored reducing the MEP substantially to the exports are hampered.

India has exported 1.6 million tonne (MT) of basmati rice valued at $ 1.7 billion in the April-July period of the current fiscal, an increase of 13.1% in terms of value compared to the same period previous year. The average value of shipment of aromatic rice in April-July (2023-24) was $ 1107/tonne.

In 2022-23, the country exported 4.56 MT of basmati rice valued at $ 4.78 billion with an average price of 1050/tonne.

According to the All India Rice Exporters Association, the average export price of basmati rice in the last five years has been $ 975/tonne.

Geographical Indication (GI) tagged basmati rice is grown in 70 odd districts in Punjab, Haryana, western Uttar Pradesh, Jammu & Kashmir and Uttarakhand. The aromatic and long grain rice commands a premium in the global market. India has a share of around 75%-80% in the global aromatic rice market.

The MEP for basmati rice and the export duty on parboiled rice until mid- October imposed in July, commerce ministry officials said, would give the government time to get an estimate of the kharif rice output for 2023-24.

The early maturity basmati rice varieties such as Pusa 1509 has started to arrive in the mandis and exporters had stated that if MEP of basmati rice is not reduced to realistic levels, it would hit mandi prices and hits farmers’ income besides pulling down the exports.

In September 2022, India had banned broken rice exports. The government has imposed a 20% export duty on parboiled rice. These measures aimed at curbing retail inflation in rice which had been in double digit for last one year.

https://www.financialexpress.com/policy/economy-govt-to-cut-mep-for-basmati-rice-to-by-30-to-850tonne-3263163/ QR Code

Published Date: October 5, 2023

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