India Extends Restrictions on Basmati Export, Traders Express Discontent
Published on: October 17, 2023.
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India has decided to continue implementing a minimum export price of $1,200 per tonne on basmati rice in order to control overseas shipments. However, the government is currently reviewing the floor price based on requests from exporters. Traders have expressed their dissatisfaction with the decision to extend the floor price beyond October 15, as it has caused them to lose markets and make exports from India unviable.
The Indian government is actively reviewing the floor price for basmati rice considering the dynamic situation, as new harvests are arriving, which is expected to lead to lower prices. The purpose of minimum export prices is to make a product less competitive in global markets by setting a threshold price below which overseas sales are not allowed. Basmati rice exports above $1,200 per tonne can still be exported as usual.
Exporters have previously held talks with the food and commerce minister, Piyush Goyal, expressing their concerns about the high minimum export price negatively impacting shipments from India. In response, the government is reviewing its decision. A decision will be made at an appropriate time, but until then, the current arrangement will remain in place.
The All-India Rice Exporters Association has advised traders to be cautious in procuring and holding inventory of paddy, as it is expected to significantly impact the business viability and potential of basmati rice export. The minimum export price has slowed down the export of this high-value item. In the April-August period, India exported nearly 2 million tonnes of basmati rice worth ₹2.2 billion, a 12% increase in value terms.
The government imposed the new regulation on basmati rice in August due to credible information that non-basmati rice was being exported using codes and provisions meant for basmati rice. The government has been focused on boosting domestic food stocks due to concerns about food output after a deficient monsoon. Cereal inflation has been in double digits for over a year, with a nearly 11% rise in September.
Source: [Hindustan Times](https://www.hindustantimes.com)
