Centre May Review Minimum Export Price Of Basmati Rice

Amid industry concerns about how outward shipments have been affected due to high value, the Centre has said that it is actively considering review of the minimum export price of $1,200 per tonne of basmati rice, the PTI reported. Rice exporters associations have been demanding that this rate should be brought down to around $850 per tonne.

The government in late August had decided not to allow exports of basmati rice below $1,200 per tonne to restrict possible “illegal” shipment of white non-basmati rice in the garb of premium basmati rice. On August 27, the commerce ministry directed trade promotion body APEDA not to register export contracts below $1,200 per tonne, according to PTI.

The Ministry of Consumer Affairs, Food & Public Distribution on Sunday said the government has taken various steps to boost domestic supply of rice and check prices. “One of the measures being that contracts for basmati rice exports with the value of $1200 per tonne and above only may be registered for issue of Registration – cum – Allocation Certificate (RCAC) effective from August 25, 2023,” it added.

Based on the representations received from the rice exporter associations that the high FOB value is adversely affecting the export of basmati rice from India, Food and Consumer Affairs Minister Piyush Goyal had attended a consultative meet with the basmati rice exporters, the statement said. “Based on the discussions in this meeting, review of FOB price of contract for issue of RCAC by APEDA for export of basmati rice is under active consideration of the government,” the ministry said.

The present arrangement will continue until an appropriate decision is taken by the government, it asserted. According to official sources, India had exported around 45 lakh tonnes of basmati rice during the last fiscal year. In the first half of this fiscal, the country has exported 18 lakh tonnes.

The average export prices of basmati rice stood between $850-900 per tonne in 2021 and 2022. This year, it was around Rs 1,050 per tonne before the government’s August 25 decision not to register contracts below $1,200 per tonne, they said. While reviewing this issue, sources said the government would also take into account the price at which other countries, including Pakistan, are selling basmati rice in international markets.

The ministry said that the $1,200 per tonne value was fixed as “the government had received credible field reports regarding misclassification and illegal export of non-basmati white rice, exports of which have been prohibited with effect from July 20, 2023.” It had been reported that non-basmati white rice was being exported under the HS code of basmati rice, it added.

“Now, the new crop of basmati has started arriving and there is generally a decline in prices when the new crop starts arriving,” the statement said while giving a rationale for the need for the review. To keep prices of rice under check, the Centre has already banned exports of broken rice and non-basmati white rice. It has also imposed an export duty on par-boiled non-basmati rice.