New Delhi: The central government Sunday informed about actively considering to review of the minimum export price of basmati rice, which is USD 1,200 per tonne at present.
This comes after experts from the industry complained that the outward shipment, due to high-prices, have been affected. Rice exporters have demanded that the cost should be cut down to USD 850 per tonne.
Why Was The Price Hiked?
The government had increased the price avoid ‘illegal’ shipment of white non-basmati rice in the name of basmati rice. Owing to which, the government decided that the basmati rice would not be exported below USD 1,200 per tonne.
On August 27, the commerce ministry instructed the trade promotion organization APEDA not to approve export agreements for amounts less than $1,200 per tonne.
In a statement issued on Sunday, the Ministry of Consumer Affairs, Food & Public Distribution announced that the Central Government has implemented various measures to enhance the availability of rice within the country and control prices.
One of these measures is that, as of August 25, 2023, only export contracts for basmati rice valued at USD 1,200 per tonne or more will be eligible for Registration-cum-Allocation Certificates (RCAC).
In response to concerns raised by rice exporter associations regarding the negative impact of the high Free on Board (FOB) value on the export of Indian basmati rice, Food and Consumer Affairs Minister Piyush Goyal participated in a consultative meeting with basmati rice exporters, as stated in the press release.
The current arrangement will remain in effect until the government makes a suitable decision, the statement affirmed.
According to official sources, India exported approximately 4.5 million tonnes of basmati rice in the previous fiscal year. In the first half of the current fiscal year, the country exported 1.8 million tonnes.
The average export prices of basmati rice were in the range of USD 850-900 per tonne in 2021 and 2022. However, this year, they reached around Rs 1050 per tonne before the government’s decision on August 25 not to register contracts below USD 1,200 per tonne.
In the process of reviewing this matter, sources noted that the government would also consider the prices at which other countries, including Pakistan, are selling basmati rice in the international markets.