Non-basmati rice exporters are not satisfied with what the government is offering in lieu of the blanket ban on the commodity. According to them, only half the problem has been addressed and the contentious issue of the letter of credit (LC) remains unaddressed. Rice exporters now want permission to export non-basmati rice, where the LC was opened prior to October 15, which is prior to the order of imposition of the ban on non-basmati rice exports.
The government had, on Tuesday, allowed export of stocks of all varieties lying in port godowns up to October 10. However, the notification of the ban was announced only on October 15, even though the cabinet had announced the ban on October 9 with immediate effect. ?The government should re-examine the case of LCs as the issue is not completely addressed. Because the notification came only on October 15, all LCs opened before that date should be allowed, and not before October 10. Many exporters had taken a commitment for these days and a container cannot be shipped out without the entire consignment being loaded,? said Vijay Setia, president, All India Rice Exporters? Association.
At the moment there are 15 vessels waiting at the Kakinada Port, incurring an expenditure of approximately Rs 2 crore per day per vessel towards demurrage and other port charges. According to industry estimates, exporters have faced a loss of Rs 500 crore in the fortnight after the ban was announced. ?The announcement took rice exporters by surprise, especially, because it came into force with retrospective effect. In fact, it was just about a month ago that the food ministry had made categorical statements discounting such a possibility. Most exporters had already tied up their contracts and the shipments were about to commence. In quite a few cases even the LCs had already been opened and part payments received in advance,? said Prem Garg, MD, Shri Lal Mahal Basmati group.
However, the issue of setting a ceiling of $425 as the minimum export price (MEP) has divided the industry. While certain exporters feel that this would lead to over-invoicing of certain non-basmati rice varieties, others are satisfied saying that at least the government?s objective to keep the ?common man?s rice? in the country would be met.