India Expected to Reduce Basmati Rice Export Prices, Sources Reveal
Published on: October 24, 2023.
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India Set to Reduce Floor Price for Basmati Rice Exports
In response to complaints from farmers and exporters, the Indian government is expected to lower the floor price for basmati rice exports. Industry sources have revealed that the minimum export price (MEP) for basmati rice may be reduced to $950 per metric ton from the current rate of $1,200 per metric ton. This move is intended to address concerns about damages to trade resulting from the higher MEP.
The decision to impose a $1,200 per ton MEP on basmati rice shipments was made by India in August, with the aim of controlling local prices ahead of key state elections. However, the arrival of the new season harvests led to a drop in domestic prices, prompting farmers and exporters to express their discontent. Despite expectations of a cut in the MEP, the government recently announced its decision to maintain the current rate until further notice. As a result, tensions rose among farmers and exporters.
India and Pakistan are the only countries that grow basmati rice, with India being the world’s largest exporter of this premium long-grain variety. India exports over 4 million metric tons of basmati rice to countries including Iran, Iraq, Yemen, Saudi Arabia, UAE, and the US. The $1,200 MEP took a toll on the trade, leading to a halt in rice purchases from farmers by exporters. Therefore, a reduction in the MEP is expected to not only benefit farmers but also resume trade in basmati rice.
Prem Garg, President of the Indian Rice Exporters Federation, commented on the potential MEP reduction, stating that it would be beneficial to both farmers and exporters who have faced difficulties due to the existing pricing restrictions. Another leading exporter from Haryana, Vijay Setia, also expressed the belief that lowering the MEP would help revive the trade in basmati rice.
In addition to the MEP on basmati rice, India has also limited the exports of non-basmati rice variants.
Source: [Reuters](https://www.reuters.com){:target=”_blank” rel=”nofollow”}
