Basmati prices decline due to export restrictions discouraging traders
Published on: October 19, 2023.
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Prices of basmati rice have dropped to Rs 3,200 per quintal as exporters in Punjab and Haryana have stopped purchasing the grain from the market. This decision was made after the Union government maintained the minimum export price (MEP) at $1,200 per tonne. Punjab and Haryana are the major basmati rice exporters, with exports totaling Rs 33,000 crore last year. The total basmati rice shipments from India stood at Rs 48,000 crore. International orders are now going to Pakistan due to the higher prices in India.
The Centre imposed the minimum export price of $1,200 per tonne on basmati exports on August 25, causing concern among exporters. However, after repeated requests, Union Minister Piyush Goyal indicated a possible lowering of the minimum export price to $850 per tonne.
The Department of Food and Public Distribution has extended the registration-cum-allocation certificate for basmati rice beyond October 15. This prompted exporters to stop purchasing basmati from farmers, leading to a decline in prices.
The prices of Basmati varieties 1,509 and 1,718 have dropped by Rs 500 per quintal since last week. The director of the Punjab Rice Millers and Exports Association, Ashok Sethi, explained that they stopped purchasing basmati from farmers due to the continuation of the minimum export price of $1,200 per tonne. This resulted in a decrease in prices to around Rs 3,200 per quintal.
Exporters in Pakistan are expected to benefit from this situation as they can now sell basmati rice at a lower price compared to the previous rate in the international market. Vijay Setia, the former president of the All-India Rice Exporters Association, revealed that due to the rice restriction in India, Pakistan has booked international orders at a higher price, ranging from $950 to $1,000.
Pakistani basmati rice production has doubled, with approximately 15 lakh tonnes now being grown. The Indian exporters returned empty-handed from recent international food fairs held in Istanbul and Irbil as international buyers turned to Pakistan. To provide a solution, a 45-day window for sales has been given to Pakistan.
(Source: [New Indian Express](https://www.newindianexpress.com))
