Basmati rice minimum export price review expected by government
Published on: October 16, 2023.
Filed under:
Taking Action to Boost Domestic Rice Supply and Manage Prices: The Central Government
The government recently announced on 15th October that they are considering revising the $1,200-per-tonne minimum export rate for rice. This revelation emerged after rice exporters demanded that the rate be decreased to around $850 per ton, as per a PTI report.
Previous to this, the government vowed to prevent rice under $1,200 a ton from leaving the country to curb the potential of “illegal” shipments of lower-priced rice masked as premium rice. Additionally, on August 27, APEDA, the trade promotional body, received instructions not to sanction export contracts under $1,200, according to the PTI report.
The Central Government’s Efforts to Balance Prices and Supplies
Implementing measures to enhance domestic rice supply and maintain prices, the Central Government now allows the registration of export contracts with a value of $1200 per tonne or higher. This provision will come into effect starting August 25, 2023.
The Ministry of Consumer Affairs and Food & Public Distribution stated on Sunday that there had been a consultative session with the rice exporters on the matter of reviewing the FOB price of the RCAC contract.
“The government is actively looking into the matter,” announced the Ministry in its statement, adding that no changes will be made until a decision from the government.
As per reports, India exported an estimated 45 lakh tonnes of rice during the previous financial year and a further 18 lakh tonnes within the first half of the current year.
Observing International Rice Prices
The mean export price of rice varied between $850 and $900 per tonne between 2021 and 2022, and it was approximately Rs 1050 during the last year prior to the August 25 government decree that contracts under $1200 per tonne will not be registered for export.
Sources have revealed that the government will additionally consider the prices at which other nations, including Pakistan, are selling rice in global markets.
Regulating Rice Exports to Prevent Misclassification
The Ministry noted in a statement that the $1200 per tonne figure was established because the government had obtained credible field reports showcasing the illicit export and misclassification of ‘non-basmati’ white rice, which has been prohibited since July 20, 2023.
It was also reported that ‘non-basmati white rice’ was being export under the ‘HS code’ of ‘basmati rice’.
As the new crop of ‘basmati’ begins to arrive, prices are projected to drop. The Centre has now banned the export of ‘non-Basmati white rice’ and ‘broken rice’. Meanwhile, an export duty on ‘par-boiled’ non-Basmati rice has been imposed.
