The Indian government has decided to continue with the minimum export price of $1,200/tonne for the basmati rice imposed in August beyond October 15, which according to exporters will impact shipment and procurement of paddy from the farmers. In August, a temporary MEP of $1,200/tonne was imposed till October 15 on basmati rice exports to restrict ‘illegal shipment of white non-basmati rice in the garb of premium basmati rice.’
According to a communication by the department of food and public distribution on Saturday stated ‘present arrangement for registration cum allocation certificate for basmati rice may continue beyond October 15, 2023 till further orders.’ The All India Rice Exporters Association (AIREA) urged members to discontinue or stop buying paddy in the interest of the trade.
“Members are advised to exercise extreme caution in the procurement and inventory holding of paddy as these are expected to significantly impact business viability and potential of basmati export at remuneration realisation,” according to the advisory by Nathi Ram Gupta, president, AIREA, the apex body of aromatic rice exporter. According to AIRE, the average export price of basmati rice in the past five years has been $975/tonne.
Exporters said that about 75% of India’s 4.5 million tonne (MT) of basmati rice exports annually are shipped at an average value in the range of $700-$1,000 a tonne. The commerce ministry had earlier stated that it has received credible field reports regarding misclassification and illegal export of non-basmati white rice whose shipment was banned this year from July 20. “There has been large variation in the contract price of basmati rice being exported with the lowest contract price being $359/tonne in the backdrop of average export price of $1,214/tonne during the current month,” according to a commerce ministry statement. Meanwhile, the early maturity basmati rice varieties such as Pusa 1509 has started to arrive in the mandis and exporters had stated that if MEP of basmati rice is not reduced to realistic levels, it would hit mandi prices and hits farmers’ income besides pulling down the exports.
A committee set up by Agricultural and Processed Food Products Exports Development Authority (APEDA) in collaboration with the agriculture ministry looked into large variations in the contract price of basmati exported in August with the lowest price being $359/tonne against the average export price of $1,214/tonne. India has exported 2 million tonne (MT) of basmati rice valued at $2.2 billion in the April-August period of the current fiscal, an increase of 12.3% in terms of value compared to the same period previous year. In 2022-23, the country exported 4.56 MT of basmati rice valued at $4.78 billion with an average price of $1,050/tonne