Minimum Export Price on Basmati pegged at above USD 1200 per ton, Pak may take advantage

The Central Government has decided to impose a Minimum Export Price (MEP) on basmati exports above $1200 per tonne. In a letter to the Chairman of APEDA, the commerce ministry said that registration-cum-allocation certificates for export of basmati must be restricted to deals above $1,200 per tonne.

In this letter, the decision taken in the meeting of the Committee of Secretaries on August 21, 2023 has been cited. This letter has been sent by the Ministry of Commerce to the APEDA Chairman on 25th August, 2023. Along with this, it has been mentioned that this decision of issuing registration cum allocation certificate for price above $ 1200 per tonne will be applicable till October 15, 2023.

After a review in the first week of October, a fresh decision will be taken for further duration. The review in October can be attributed to the arrival of new crops by the government. Basmati paddy will start arriving in the market in October and the status of its production will also become clear. However, this step of the government may have an adverse effect on the price of basmati paddy.

Along with this, through a notification issued on August 25, the Finance Ministry has also imposed a 20 per cent duty on the export of Parboiled Rice. At present, the price of Indian basmati rice is available up to $1550 per tonne in the international market. At the same time, the price of India's competitor Pakistan's basmati rice is $ 1350 per ton. Pakistan can take the benefit of the minimum export price imposed by India.

In the latest report of the US Department of Agriculture, the export of rice from Pakistan has been estimated at 4.9 million tonnes this year. Last year 3.6 million tonnes of rice was exported from there. At the same time, according to this report, the export of rice from India is estimated to be 190 lakh tonnes. Last year India exported 223 lakh tonnes of rice. Basmati rice accounted for about 4.5 million tonnes in India's total rice exports.

The government has continuously taken several steps to curb rice exports. Last year in September, 2022, the export of broken rice was banned. Along with this, 20 percent export duty was imposed on the export of non-basmati rice. However, parboiled rice was kept out of it.  After that, on July 20 last month, the government banned the export of non-basmati white rice. On August 25, 2023, it was decided to impose 20 percent duty on the export of Sela rice. At the same time, a minimum export price of above $1200 per tonne has been fixed for basmati rice.

When Rural Voice spoke to a highly placed source in the government about this, he said that if the government had not taken measures to curb rice exports, then up to 300 lakh tonnes of rice could have been exported from the country. 

The government has taken these steps to maintain availability in the domestic market and to prevent rising prices at a time when assembly elections in five states and Lok Sabha polls are not far way.