India’s Basmati Rice Growers Concerned About Pakistani Competition and Declining Exports Due to Floor Price
Published on: October 18, 2023.
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India’s decision to maintain the current floor price for basmati rice exports is causing concern among farmers and millers, who believe it will negatively impact overseas sales and farm income. Basmati rice is primarily exported by India and Pakistan, with India alone exporting over 4 million metric tons of the premium long-grain variety to several countries including Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates, and the United States.
The Indian government introduced a minimum export price (MEP) of $1,200 per ton for basmati rice in August, with expectations that it would lower the price. However, the government announced on Saturday that it will maintain the floor price until further notice. This move has raised concerns among farmers and millers, as it leaves them with large stocks of the new-season basmati rice, as well as impacting farm income.
India, as the world’s biggest rice exporter, also implemented restrictions on the export of non-basmati rice varieties in order to control domestic prices before key state elections. This has further complicated the situation for farmers and millers.
According to Sukrampal Beniwal, a basmati rice grower, the decision to maintain the $1,200 MEP will lead to significant losses for farmers. Despite having harvested their crop, the lack of buyers is causing distress among farmers. Prices of basmati varieties have fallen by over 20% since the MEP was imposed.
Vijay Setia, a prominent exporter from Haryana, has expressed disappointment with the decision, asserting the need for an immediate reduction of the MEP to $850-$900 per ton. As a consequence of the current situation, basmati rice farmers are struggling to sell their produce, as millers and traders have stopped coming to wholesale markets.
Some exporters have also raised concerns about India losing its grip on the basmati rice market in favor of Pakistan, as the high MEP may push buyers toward Pakistani suppliers in the short term.
In conclusion, India’s decision to maintain the floor price for basmati rice exports has raised concerns among farmers and millers. It is feared that this decision will negatively impact overseas sales, farm income, and the domestic rice market.
