India plans to reduce minimum price for basmati rice exports, say sources
Published on: May 9, 2024.
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India to Reduce Floor Price for Basmati Rice Exports
By Mayank Bhardwaj
India is set to lower the floor price for basmati rice exports in response to a significant decline in overseas sales of the premium grain. Sources familiar with the matter indicate that the floor price will be reduced to $850 a metric ton, down from the previous rate of $1,200 a ton. The move aims to support millers and traders in shipping out the rice grade. The floor price, or minimum export price (MEP), was initially set last month at $1,200 a metric ton to prevent the export of non-basmati rice as basmati rice.
According to experts, the reduction in MEP will benefit farmers who have been experiencing losses due to the decline in exports. It will also help India maintain its leading position in the global basmati rice market. As basmati rice is not widely consumed in India, the upcoming new season crop could have led to an excess supply of the superior grade. This would have adversely affected prices and the rice sector as a whole. By lowering the MEP, India aims to prevent such a situation and protect the interests of farmers.
India and Pakistan are the exclusive growers of premium aromatic basmati rice. India exports approximately 4 million tons of basmati rice to countries including Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates, and the United States. The previous MEP of $1,200 per ton was considered too high, preventing many millers and traders from exporting basmati rice. The reduction in MEP aims to increase the volume of basmati rice exports from India.
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