India slashes basmati rice floor price to boost exports
Published on: October 26, 2023.
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India Lowers Basmati Rice Price for Exports Amidst Trade Complaints
India has decided to reduce the floor price for basmati rice exports from $1,200 to $950 per metric ton, according to a government source. The decision comes after farmers and exporters raised concerns that the previous price was harming the trade by causing shipment delays.
In August, India had implemented a minimum export price (MEP) of $1,200 per ton for basmati rice shipments in order to control local prices leading up to important state elections. The MEP was supposed to be lowered once the new season harvests arrived, but on October 14, the government announced that it would maintain the price until further notice. This decision upset farmers and exporters, who argued that the new season’s rice crops had resulted in a decrease in domestic prices.
Following the complaints, authorities have now decided to actively review the MEP. The reduction in price is expected to restore the competitiveness of Indian basmati rice exports in the global market. Exporters are optimistic about regaining lost ground in the industry.
India is one of the major exporters of basmati rice, along with Pakistan. It exports over 4 million metric tons of basmati rice, known for its distinct aroma, to various countries including Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates, and the United States.
This year, India is projected to produce more basmati rice than the previous year due to increased cultivation areas. Farmers expanded their cultivation areas after achieving record profits last year. However, they faced difficulties in selling their paddy as millers and traders stopped visiting wholesale markets to make purchases.
With the reduction in the floor price, millers and traders are expected to resume purchasing paddy, which will help stabilize paddy prices. Over the past two months, paddy prices have dropped by approximately 20%.
Aside from basmati rice, India has also placed restrictions on the export of non-basmati rice varieties.
Overall, the revised floor price for basmati rice exports aims to address the concerns of farmers and exporters while maintaining the competitiveness of Indian basmati rice in the global market.
Source: [Source](https://www.reuters.com){target=”_blank”}
