Export restrictions discourage traders, causing a decline in Basmati prices
Published on: October 19, 2023.
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Prices of Basmati Rice Decline as Punjab and Haryana Exporters Halt Purchases
Prices of basmati rice, a fine quality aromatic rice, have dropped to Rs 3,200 per quintal as exporters in Punjab and Haryana have stopped purchasing the grain from the market. This comes after the Union government decided to maintain the minimum export price (MEP) at $1,200 per tonne. Punjab and Haryana are major basmati rice exporters, with exports totaling Rs 33,000 crore in the last financial year. The total basmati rice shipments from India stood at Rs 48,000 crore.
Due to the higher MEP, international orders are now being directed towards Pakistan, causing concern among Indian exporters. However, there may be hope for a reduction in the minimum export price, as Union Minister Piyush Goyal has indicated a possible decrease to $850 per tonne.
The Department of Food and Public Distribution, under the Ministry of Consumer Affairs and Food and Public Distribution, recently extended the registration-cum-allocation certificate for basmati rice beyond October 15. This extension led exporters to stop purchasing basmati from farmers, resulting in a decline in prices.
In the past week, prices of Basmati 1,509 and 1,718 varieties have dropped by Rs 500 per quintal. Ashok Sethi, director of Punjab Rice Millers and Exports Association, explained that negotiations had taken place with the government to review the decision of not allowing basmati rice exports below $1,200 per tonne. There was hope that the price could be lowered to around $850. However, it was recently announced that the minimum export price of $1,200 would continue. As a result, purchases of basmati rice from farmers were stopped, leading to the current decline in prices.
Exporters in Pakistan are expected to benefit from this situation, as Indian exporters previously sold basmati rice at a rate of $700-1,200 in the international market. Vijay Setia, former president of All-India Rice Exporters Association, mentioned that due to the price restriction, Pakistan has already booked international orders at $950-1,000.
Satellite imagery has revealed that Pakistan has doubled its basmati growing area to approximately 1.5 million tonnes. Because of the price restriction, Indian exporters returned empty-handed from recent international food fairs held in Istanbul and Irbil, as international buyers turned to Pakistan. It has already been decided to give Pakistan a 45-day window for sales.
Source: [New Indian Express](https://www.newindianexpress.com)
