Global Rice News

The prices of fine quality aromatic rice, also known as basmati rice, have witnessed a significant decline, reaching Rs 3,200 per quintal. This drop is primarily due to the decision of exporters in Punjab and Haryana, two major basmati rice exporting regions in India, to stop purchasing basmati rice from the market approximately one week ago. The reason behind this halt in purchasing is the imposition of a minimum export price (MEP) of $1,200 per tonne by the Union government.

It is important to note that Punjab and Haryana are crucial contributors to India’s basmati rice exports, which accounted for around Rs 33,000 crore in the previous financial year. The total basmati rice exports from India reached Rs 48,000 crore. However, the imposition of the MEP has raised concerns among exporters, as international orders have started diverting to Pakistan.

The Union government had initially imposed the minimum export price of $1,200 per tonne on basmati rice exports on August 25, causing anxiety among exporters. In response to repeated appeals, Union Minister Piyush Goyal hinted at a potential reduction in the minimum export price to $850 per tonne on September 25. However, exporters were disappointed when last week, the Department of Food and Public Distribution, operating under the Ministry of Consumer Affairs and Food and Public Distribution, issued a new circular extending the registration-cum-allocation certificate for basmati rice beyond October 15.

This recent development has led to exporters discontinuing their procurement of basmati rice from farmers, resulting in the decline in prices. Within the past week, prices for Basmati 1,509 and 1,718 varieties have seen a drop of Rs 500 per quintal. Ashok Sethi, director of the Punjab Rice Millers and Exports Association, revealed that the government had previously assured exporters that the minimum export price would be reevaluated and could potentially be around $850.

Despite these challenges, the rice export market remains highly competitive. To stay ahead, it is crucial for rice exporters to focus on maintaining quality, meeting international standards, and offering competitive pricing. Pakistani rice exporters have now become strong competitors due to the MEP imposed in India. To address these shifting dynamics in the market, exporters need to explore new strategies for attracting global buyers.

In conclusion, the decline in basmati rice prices in India is a result of exporters in Punjab and Haryana ceasing their purchase of basmati rice from the market due to the Union government’s decision to uphold a minimum export price. This has led to concerns among exporters as international orders divert to Pakistan. Despite these challenges, exporters should focus on maintaining quality and competitiveness to thrive in the market.

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