Basmati rice farmers in India suffer losses as increased floor price impacts exports
Published on: October 16, 2023.
Filed under:
A Tough Blow to Indian Basmati Rice Exporters Amid Unchanged Price Floor
The stagnant floor price for basmati rice exports from India is said to severely curtail overseas sales of this premium rice variety. This outcome is sharply reducing farmers’ incomes and leaves them burdened with substantial new-season variety stocks.
India and Pakistan are the sole cultivators of basmati rice. Each year, India ships out over four million metric tons of the world-renowned, aromatic, long-grain basmati to nations such as Yemen, Saudi Arabia, Iran, Iraq, the USA, and the United Arab Emirates.
The Indian government set a minimum export price (MEP) of $1,200 per ton in August. While it was anticipated that this figure would be reduced, an official announcement on Saturday confirmed it will be kept at this level until further notice.
Non-Basmati Export Restrictions and Consequences
As the biggest exporter of rice worldwide, India has additionally curtailed non-basmati rice exports to temper soaring domestic prices ahead of essential state elections.
“We’re facing enormous losses,” expressed Sukrampal Beniwal, a local basmati cultivator in Northern India. “We’ve reaped our crops, but find no buyers.”
India’s farmers typically plant summer-grown rice variants in the June and July monsoons and commence harvesting in October. The fresh harvest results in lowered prices.
Unsettled Farmers and Exporters
Farmers, along with rice suppliers and rice exporters from Pakistan, had faith that the Indian administration would reduce the MEP they deem too steep alongside the arrival of the new-crop season.
Leading exporters such as Vijay Setia fear substantial repercussions. Setia, from Northern India’s prime grain state of Haryana, emphasized that the government must swiftly reduce the MEP to $850-$900 per ton.
Basmati Rice Sales Stagnant
Basmati growers are finding it difficult to get buyers for their produce because of a sharp drop in visits by traders and millers to scores of wholesale markets, according to Beniwal. Following the MEP’s imposition, traders note that basmati paddy prices have plunged by over twenty percent.
As most Indians tend not to consume basmati, and the national government doesn’t procure it to enlarge state reserves, farmers are left in a challenging situation.
An anonymous key exporter voiced concern: “We are inadvertently paving the way for Pakistan to dominate the short-term basmati market.”
