India reduces price of Basmati rice exports to boost shipments
Published on: October 28, 2023.
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Indian Government Reduces Floor Price for Basmati Rice Exports, Boosting Competitiveness in Global Markets
New Delhi, October 27 – The Indian government has made the decision to cut the floor price for basmati rice exports from USD 1,200 per metric ton to USD 950 per metric ton, according to an official government source. This move comes in response to complaints from farmers and exporters who argued that the high floor price was hindering trade by causing a delay in shipments.
In August, India had imposed a minimum export price (MEP) of USD 1,200 per ton on basmati rice shipments in order to control local prices in advance of important state elections. The expectation was that the MEP would be reduced following the arrival of new season harvests. However, on October 14, the government announced that it would maintain the MEP, leading to dissatisfaction among farmers and exporters who noted that the new season’s rice crops had caused a decline in domestic prices. The government has since stated that it is actively reviewing the MEP.
This reduction in the floor price is expected to restore the competitiveness of Indian basmati rice shipments in global markets. Atul Garg, the managing director at GRM Overseas, a leading exporter, has expressed optimism about regaining lost ground in the export market.
Basmati rice is primarily exported by India and Pakistan, with India alone exporting over 4 million metric tons to countries like Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates, and the United States. This premium long-grain variety is renowned for its distinctive aroma.
It is anticipated that India will produce more basmati rice this year compared to the previous year, as farmers have expanded their cultivation areas due to record returns last year, according to a dealer with a global trade house. However, farmers have encountered difficulties in selling their paddy as millers and traders have stopped visiting key wholesale markets for purchases. The dealer predicts that once buying resumes, it will help stabilize paddy prices, which have fallen nearly 20% in the past two months.
In addition to reducing the floor price for basmati rice, India, the world’s largest rice exporter, has also imposed restrictions on the export of non-basmati rice varieties.
Source: KNN India
