Evaluating India’s basmati rice export floor price: An analysis
Published on: October 16, 2023.
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Rethinking Basmati Rice Export Floor Pricing: Indian Government
The Indian Government informed on Sunday that it has taken the decision to actively reevaluate the established floor price charged for basmati rice exports, even as it persistently restrains overseas shipments.
The decision emerged after New Delhi, globally recognized as the largest rice exporters, declared on Saturday that it planned to uphold the minimum export price (MEP) of basmati rice at $1,200 per ton. This pricing was initially enforced in August to stabilize local rice prices.
However, Saturday’s announcement provoked unease among exporters, who expressed fears about a steep decline in shipments as a direct result of this governmental decision on rice export from India.
Responding to Declining Rice Prices
The Indian Government’s Sunday statement declared a general downturn in prices due to the arrival of the new rice crop. The government further stated that the consumer affairs minister had a meeting with some exporters. During this session, the rice exporters indicated that the floor price was negatively impacting exports.
Future Considerations on Floor Price
After these discussions, the government has under active consideration a review of the floor price. The statement explains that the MEP is an initiative designed to aid authorities in ensuring that white broken rice is not exported fraudulently disguised as basmati rice.
It is pertinent to note that India, in July, had instituted a ban on exports of non-basmati white rice. Subsequently, the government imposed a duty of 20% on exports of parboiled rice.
