Review of Basmati Rice’s Minimum Export Price by Centre
Published on: October 17, 2023.
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Amid concerns from the rice exporting industry about the impact of high prices on exports, the Indian government has announced that it is considering a review of the minimum export price for basmati rice. Currently set at $1,200 per tonne, rice exporter associations are calling for this rate to be reduced to around $850 per tonne.
The government previously decided in late August to not permit exports of basmati rice below $1,200 per tonne in order to prevent the illegal export of non-basmati rice disguised as premium basmati rice. The Ministry of Consumer Affairs, Food & Public Distribution has stated that contracts for basmati rice exports valued at $1,200 per tonne and above will be registered for the issuance of a Registration – cum – Allocation Certificate (RCAC) from 25th August 2023. The aim of these measures is to boost domestic rice supply and control prices.
Responding to concerns from rice exporter associations, Food and Consumer Affairs Minister Piyush Goyal met with basmati rice exporters to discuss the issue. The ministry has announced that it is actively considering a review of the FOB price of contracts for the issue of RCAC by the Agricultural and Processed Food Products Export Development Authority (APEDA) for the export of basmati rice. The government will continue with the current arrangement until a suitable decision is made.
Official sources reveal that India exported approximately 4.5 million tonnes of basmati rice in the last fiscal year, with 1.8 million tonnes exported in the first half of this fiscal year. The average export prices for basmati rice have previously ranged between $850 and $900 per tonne. However, this year the price was around Rs 1,050 per tonne before the government’s decision in August not to register contracts below $1,200 per tonne.
During the review process, the government will also take into account the prices at which other countries, including Pakistan, are selling basmati rice in international markets. The government set the value of $1,200 per tonne in response to credible reports of misclassification and illegal export of non-basmati white rice, which has been prohibited from export since 20th July 2023.
The Ministry of Consumer Affairs, Food & Public Distribution justifies the need for the review by stating that the new crop of basmati rice has started arriving and prices tend to decline at this time. In order to control rice prices, the government has already imposed a ban on the export of broken rice and non-basmati white rice, as well as an export duty on par-boiled non-basmati rice.
Source: ABP Live
