India reduces minimum price for basmati rice exports to boost shipments
Published on: October 27, 2023.
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India Reduces Floor Price for Basmati Rice Exports
India has decided to lower the floor price for the export of basmati rice in response to complaints from farmers and exporters. The floor price has been reduced from $1,200 per metric ton to $950, according to a government source. The initial price was implemented to control local prices before important state elections, but it ended up causing delays in shipments and negatively impacting the trade. The new price will help regain competitiveness in global markets.
Basmati rice, a premium long-grain variety known for its fragrance, is exported by both India and Pakistan. India alone exports over 4 million metric tons of basmati rice to countries such as Iran, Iraq, Saudi Arabia, and the United States. This year, India is expected to produce more basmati rice due to increased cultivation areas following high returns last year.
However, due to the previous floor price, farmers were struggling to sell their paddy as millers and traders were hesitant to make purchases. With the reduction in the floor price, they are expected to resume buying paddy, which will help stabilize prices that have dropped nearly 20% in the last two months.
In addition to lowering the floor price for basmati rice, India has also limited the export of non-basmati rice varieties.
Overall, this decision by the Indian government is expected to benefit both farmers and exporters, allowing for smoother trade and increased competitiveness in global markets.
Source: [Reuters](https://www.reuters.com)
