Indian Exporters Worry Over Pakistan’s Potential Dominance in Basmati Rice Market
Published on: October 17, 2023.
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Exporters in India have expressed discontent with the government’s decision to maintain the current minimum export price (MEP) for basmati rice, as they fear it will allow Pakistan to gain a larger market share. India and Pakistan are the only two producers of basmati rice globally, with India exporting over 4 million metric tons of the premium variety to various countries worldwide. In August, the Indian government implemented a floor price of $1,200 per ton for basmati rice exports, and it was anticipated that this would be reduced. However, the government recently announced that the floor price would remain the same until further notice.
Unnamed exporters have voiced concerns about the impact on the farmers and the market, claiming that it empowers Pakistan in the short term. Additionally, the decision to maintain the MEP has led to losses for exporters of non-basmati rice varieties. The government’s aim is to stabilize domestic prices ahead of crucial state elections, resulting in fewer buyers and decreased demand for basmati rice from farmers.
Farmers who have planted summer-sown rice varieties are facing difficulties in selling their produce due to the lack of buyers in wholesale markets. As a result, prices of basmati rice have dropped by more than 20% since the implementation of the MEP. It is worth noting that basmati rice is not widely consumed within India, and the government does not purchase the variety to build state reserves.
Overall, exporters are urging the Indian government to reduce the MEP to $850-$900 per ton immediately to support the industry and ensure a fair market for basmati rice.
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