The Central government on October 26 stated that it has reduced the floor price for basmati rice exports to $950 per tonne from $1,200 per tonne amid concerns that higher prices were hurting outward shipments.
In a communication to export promotion body APEDA, the Union Commerce Ministry has said "it has been decided to revise the price limit for registration of contract for export of basmati rice from $1,200 per tonne to $950 per tonne."
Rice inflation has remained persistently high, averaging at 12 percent for the past 4 months. With harvests beginning to come into the market, the government is expecting a sharp drop in prices in the coming one month.
The Centre had on August 25, in another attempt to increase domestic rice supply and control prices, mandated that basmati rice contracts only with a value of $1,200 per tonne or above could be registered for exports till October 15. However, the order was extended by the government till ‘further notice.' Recently, the food ministry had said the government is considering the industry’s demand to reduce the floor price.
The commerce ministry, while notifying the minimum price, had stated that it has received credible field reports regarding misclassification and illegal export of non-basmati white rice whose shipment was banned from July 20, 2023.
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Since then, the government has been consulting with exporters who had objected to it, citing losses.
Also Read: Basmati MEP may be down to $850 a tonne in 2 weeks as local supply eases
What rice experts say?
"The decision to cut MEP of basmati rice will benefit all key supply chain stakeholders. The continued industry representation and consultation with the government have finally yielded the desired result. The All India Rice Exporters' Association (AIREA) has played a commendable role in effectively conveying the industry concerns to the government and ultimately convincing the concerned authorities to reduce the MEP to make basmati rice exports viable. The reduction in the MEP will again make Indian premium quality basmati rice attractive to the global buyers," said Atul Garg, MD GRM Overseas
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