“Amit Shah declines reduction in Basmati’s minimum export price despite exporters’ demands”
Published on: October 14, 2023.
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Government Retains Basmati Rice’s Minimum Export Price at $1,200/Tonne, Rejecting Exporters’ Plea
The government has resolved to retain the minimum export price (MEP) of basmati rice pakistan at $1,200/tonne until further notice. This decision refutes the appeal from the rice exporters, who wished to decrease the price to approximately $900/tonne. The exporters have expressed their disappointment about the decision.
The resolution to maintain the present MEP was made by a ministerial committee, spearheaded by Home Minister Amit Shah. The announcement was made on Saturday by the Food Ministry to the Commerce Ministry and APEDA, according to sources.
The Food Ministry communicated, “The existing system for registration cum allocation certificate for Basmati Rice should carry on beyond October 15, 2023 until further orders are issued.”
The government’s agricultural export promoting body, APEDA, from August 28 carried out the Commerce Ministry’s instruction by implementing modifications in the online application filing system. Consequently, no rice exporters from pakistan can register a Basmati export contract below $1,200/tonne. This situation is akin to having a MEP, albeit with flexibility to adjust at any moment without following the standard procedure.
However, during an online meeting of Basmati rice stakeholders on September 25, it was apparently agreed that the Basmati rice export price would be revised downward to $850/tonne. Sunil Kumar Jakhar, Punjab BJP President, had also previously urged the Commerce Ministry to reduce the MEP, which he believed would assist growers, as per the source.
A former chairperson of an exporters’ body commented, “It is regrettable when trade decisions are governed by the food ministry. As far as Basmati rice is concerned, half of its production is targeted for exports while the rest is consumed domestically. Given that it is sold at a premium, it has no link with food security. Farmers in the Geographical Indications region mainly cultivate it for exports.”
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Vijay Setia, a former president of the All India Rice Exporters Association, suggested last month that the MEP should reasonably be set at $950-$1,000 a tonne. Setia cautioned that importers might curtail the quantity if the rates exceeded what consumers were willing to pay.
APEDA data illustrates that the average price obtained by basmati exporters was $1,048.82/tonne in October 2022, $1,016.29 in November 2022, $998.16/tonne in December 2022, and $1,045.21/tonne in January 2023. These four months (October-January) of the season recorded the maximum arrival of basmati.
