Government slashes minimum price for exporting basmati rice
Published on: October 27, 2023.
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The Indian government has recently lowered the floor price for basmati rice exports from $1,200 per tonne to $950 per tonne. This decision comes in response to concerns that the higher prices were negatively impacting the country’s outward shipments of rice. The Union Commerce Ministry communicated this change to the Agriculture and Processed Food Products Export Development Authority (APEDA), instructing them to only register contracts with a value of $950 per tonne and above.
The move to reduce the floor price for basmati rice exports was driven by demands from rice exporter associations, who argued that India was losing its export market to neighboring countries like Pakistan due to tough price competition. They pointed out that India’s average export realizations over the past few years ranged from $800 to $900 per tonne. The associations also highlighted the fact that the high FOB (free on board) value was negatively affecting basmati rice exports from India.
The government’s decision to lower the floor price is expected to benefit Indian basmati rice exporters by reinstating their competitiveness in global markets. Exporters are now working towards regaining lost ground and the buying cycle is showing signs of gaining momentum. This move will benefit all key stakeholders in the basmati rice supply chain.
The reduction in the floor price for basmati rice exports comes as the Indian government takes steps to control retail prices and boost domestic supply. Last year, the export of broken rice was banned, and this year, restrictions were placed on non-basmati white rice. Additionally, a 20% export duty was imposed on par-boiled non-basmati rice. These measures form part of the government’s efforts to ensure an adequate and affordable supply of rice within the country.
It is worth noting that India’s rice production is expected to reach a record 135.75 million tonnes in the current year, compared to 129.47 million tonnes in the previous year. Despite this increase in production, the decision to lower the floor price for basmati rice exports was deemed necessary to promote exports and support the market.
Overall, the government’s decision to reduce the floor price for basmati rice exports is expected to have a positive impact on India’s rice industry. It will help regain lost market share, benefit exporters and farmers, and ensure the competitiveness of Indian basmati rice in global markets.
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