Chandigarh, November 11
Reeling under a shortfall of almost 15 million tonnes in rice production during this kharif marketing season (KMS), the government is now considering raising the Minimum Export Price (MEP) of basmati by at least $ 100 per tonne. The move would not only discourage export of basmati but also ease the prices in the domestic market.
Highly placed sources informed TNS that the issue will be taken up during the meeting of Empowered Group of Ministers (EGoM) of Food, scheduled for tomorrow. Sources said though the Ministry of Commerce has opposed the move, the government is keen to raise the MEP to $ 1,000 per tonne. This will be the second time in three months that the MEP of basmati will be raised, as a tool to calibrate exports.
In September alone, the MEP was raised from $ 800 per tonne to $ 900 per tonne. It may be noted that the basmati exports are already down, also leading to a fall in Indian basmati prices in international market. As against 3 lakh tonnes of basmati exported from India in April this year, the exports were down to just 1.80 lakh tonnes in October.
The price fetched by the premium rice was also down from $ 1,550 per tonne in April to $ 1,180 per tonne in October. Thus, the Ministry of Commerce is opposing the hike in MEP, as it would further curtail rice exports from the country.
Though the move to hike the MEP may not allay apprehensions over a possible tight supply and ease out the retail price in domestic market, it could have far-reaching consequences on basmati export as well as the growers, especially in Punjab and Haryana. This is the time when the basmati buying is on at full swing. But because of the low demand in the international market, basmati prices are crashing.
Rice exporters say with the hike in MEP, prices will crash further as exporters will stop buying basmati.
Vijay Setia, former president of All India Rice Exporters Association, said rice exporters are selling the premium rice to foreign clients any where between $ 950 per tonne to $ 1,050 per tonne. “If the MEP is raised, we will have to re-negotiate deals with our importers. This will take time and the basmati prices will crash further. Also, there is little demand for basmati in the West Asian countries. By hiking the MEP, we will lose out on export orders,” he rued.
