Centre’s unchanged floor price prompts basmati traders strike
Published on: October 15, 2023.
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Strike Declared by Haryana Rice Exporters over MEP Standoff with Union Government
The refusal of the Union government to curb the minimum export price (MEP) for aromatic long-grained basmati rice from $1,200 (₹99,589) per tonne to US $850 has instigated the rice exporters and traders in Haryana to launch an indefinite strike from Sunday. The direct implications of this strike would mean no procurement of paddy from the farmers and the mandis. (
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AIERA President’s Response
Nathi Ram Gupta, the President of the All India Rice Exporters Association (AIREA), shed light on the issue, stating, “We, the rice exporters and rice millers had a joint meeting in Karnal on Saturday evening. While we await the government’s reply for the next two days, we shall convene with the agricultural and processed food products export development authority chairman on Monday, with a view to make further decisions.”
Gupta decried the government’s act as a betrayal, inadvertently inciting advantages for rice exporters from Pakistan and other countries. He stressed that the MEP pegged at US $1,200 per tonne is not reasonable, given that international market prices for basmati rice had been hovering around US $925 for several years. Consequently, the exporters have expressed their inability to conduct exports at these prices, and have hence decided to cease procurement of paddy from Sunday.
Consequences of the Government’s Stance
Despite the Union’s refusal to alter the current MEP arrangement of US $1,200 per tonne for basmati rice registration-cum-allocation certification, the implications created an unwelcome stir. Haryana, as the prime contributor to basmati rice exports with a commanding 42%, feared an adverse blow to its farmers and traders.
This troubling development compounds the uncertainty for rice exporters, given the ongoing harvesting season in the mandis. Just as hopes were rising over a positive response from the Union ministry in a meeting held on September 26, this unwarranted shock is expected to usher in a depressive trend in premium basmati paddy prices, currently at ₹4,200 a quintal in grain markets.
Unintended Implications for Farmers and Traders
With about 40% of the basmati rice yet to be harvested, an impending price drop could prove detrimental to the farming community. The MEP imposition of $1,200 on basmati rice shipments by the Union government in August was primarily aimed at curbing inflation and stabilizing local rice prices.
Vijay Setia, a former AIERA president, and a renowned rice exporter from Karnal, was quite vocal about the ensuing dilemma. He emphasized, “The fact that buyers and rice traders will begin to evacuate from Indian markets can detrimentally impact traders and farmers. This move could notably trigger a decrease in prices across all basmati varieties.”
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About the Author
Neeraj Mohan is a correspondent, covering various districts of Haryana, including Karnal, Kaithal, Kurukshetra, Panipat, and Yamunanagar.
