Global Rice News

The government of India has made a significant decision to reduce the floor price for basmati rice exports. The price has been reduced from USD 1,200 per tonne to USD 950 per tonne. This decision was made after concerns were raised that higher prices were negatively impacting outward shipments.

The Union Commerce Ministry communicated this decision to the Agricultural and Processed Food Products Export Development Authority (APEDA), which is responsible for promoting exports. APEDA has been instructed to register only those contracts that have a value of USD 950 per tonne and above.

The government’s move comes after it previously decided not to allow exports of basmati rice below USD 1,200 per tonne. This decision was made to prevent the possible “illegal” shipment of white non-basmati rice masquerading as premium basmati rice.

India’s total exports of basmati rice in terms of price amounted to USD 4.8 billion in 2022-23, with a volume of 45.6 lakh tonne.

Rice exporter associations have been demanding a reduction in the floor price for the past two months. They argue that India is losing its export market due to tough price competition from neighboring countries like Pakistan. They have also pointed out that India’s average export realizations in the last 2-3 financial years have been USD 800-900 per tonne.

The Ministry of Food and Consumer Affairs has taken note of these concerns and has engaged in discussions with basmati rice exporters. The minister, Piyush Goyal, attended a consultative meet with the exporters to address the issue.

The Indian government has also implemented measures to control the retail prices of rice and boost domestic supply. Last year, it banned the export of broken rice, and this year, it imposed restrictions on non-basmati white rice. Additionally, a 20% export duty was introduced for par-boiled non-basmati rice. These measures have resulted in restrictions being imposed on all varieties of non-basmati rice.

APEDA plays a vital role in the export of basmati rice. It is responsible for registering all contracts and issuing registration-cum-allocation certificates for basmati rice exports.

The decision to reduce the floor price for basmati rice exports will have a positive impact on exports, especially now that the new crop of basmati rice has started arriving in the market. The Ministry of Food and Consumer Affairs has stated that prices generally decline when the new crop comes in.

This year, rice production is estimated to reach a record 135.75 million tonnes. This increase in production, coupled with the reduction in floor price, will help increase exports of basmati rice.

Experts in the industry believe that the decision to cut the minimum export price (MEP) of basmati rice will restore the competitiveness of Indian basmati rice shipments in global markets. Exporters are now working towards regaining lost ground, and the decision is expected to benefit all key stakeholders in the supply chain.

The reduction in the floor price of basmati rice has been welcomed by Rajya Sabha member Vikramjit Singh Sahney from Punjab. Sahney stated that this decision is a big relief for exporters and farmers. He emphasized that there are nearly 40 varieties of basmati rice, with prices ranging from USD 850 to USD 1,600 per tonne. Lower varieties of basmati rice contribute to 70% of the export market, according to Sahney.

Overall, the government’s decision to reduce the floor price for basmati rice exports is a positive step that will help boost the competitiveness of Indian basmati rice in international markets. With increased exports, farmers and exporters are expected to benefit from this decision.

Source: [ZeeBiz](https://www.zeebiz.com){:target=”_blank” rel=”nofollow”}