Government likely to review minimum export price of basmati rice

The Central Government has taken steps to increase domestic rice supply and control prices

The government said on October 15 that they're looking into reviewing the $1,200-per-tonne minimum export price for rice. This comes after rice exporters' groups have been asking for the rate to be lowered to around $850 per ton, according to a report by PTI.

Last month, the government said they won't let rice under $1,200 a ton out of the country, which could lead to "illegal" shipments of cheaper rice disguised as premium rice. On the other hand, on August 27, they told APEDA, the trade promotion body, not to sign export contracts below $1,200, the PTI report added.

The Central Government has taken steps to increase domestic rice supply and control prices, including allowing contracts with a value of $1200 per tonne or more to be registered for export. This will start on August 25, 2023. On Sunday, the Ministry of Consumer Affairs and Food & Public Distribution announced that the government had held a consultative meeting with the rice exporters to review the FOB price of contracts for the issue of RCAC.

"The government is actively looking into the matter," the statement said.

The statement also added that this arrangement will stay in place until the government makes a decision. According to reports, India exported about 45 lakh tons of rice in the last financial year, and 18 lakh tons in the first six months of this year.

The average export price of rice was between $850 and $900 per tonne between 2021 and 2022, and it was about Rs 1050 last year before the government said on August 25 that contracts below $1200 per tonne would not be registered. After looking into this, sources said that the government will also consider the rice prices sold by other countries, like Pakistan, in international markets.

The Ministry said in a statement that the $1,200 per tonne price was set because the government had received reliable field reports about misclassification and illicit export of 'non-basmati' white rice, which has been banned since July 20, 2023. It was also reported that 'non-basmati white rice' was exported under 'HS code' 'basmati rice'.

Now that the new crop of 'basmati' has started to arrive, prices tend to drop when the new crop arrives. The Centre has already banned the export of 'broken rice' and 'non-Basmati white rice'. It has also put an export duty on 'par-boiled' non-Basmati rice.