Centre scraps minimum export price for basmati

The Indian Government has withdrawn the minimum export price (MEP) of $950 per tonne for basmati rice, aiming to boost exports of the aromatic rice varieties and improve prices for farmers.

A senior officer in the Ministry of Commerce has confirmed to The Tribune that the decision has been taken and it has now been sent to the Agricultural and Processed Food Products Export Development Authority (APEDA). The decision, say sources, was necessitated as global prices of some varieties of basmati rice had fallen below the MEP imposed by the government. India controls 80 per cent of the aromatic rice export market, exporting to Saudi Arabia, Iran, Iraq, Yemen, the UAE and the US.

The MEP, initially set at $1200 per tonne and later reduced, had led to reduced competitiveness of Indian basmati in the global market, with buyers turning to cheaper alternatives from countries like Pakistan. As a result, there was glut in the domestic market, especially for the low-end varieties of basmati like PUSA basmati 1509, which ultimately led to a fall in their prices and leading to losses for growers.

With the MEP lifted, basmati prices have started to rise, benefiting farmers in Punjab and Haryana, the major basmati-producing states. Prices in some areas have increased to Rs 2,985 per quintal in Amritsar and Rs 3,000 per quintal in Taraori, confirmed Vijay Setia, former chairman of the All-India Rice Exporters Association and a prominent exporter from Haryana.

The biggest basmati exporter in Punjab and president of the Punjab Rice Millers and Exporters Association, Arvinder Pal Singh, hoped that the removal of MEP on basmati rice exports would give a boost to export of lower-end varieties.

“Though the total export of basmati last year did not fall in volume terms, there was no expected year-on-year growth of 10 per cent in exports. With the curbs on export gone, we will be able to reclaim our position as the most important rice exporting country,” he said.

Another rice exporter Ranjit Singh Josan hoped that the government would now abolish the existing 20% export duty as well as full reopening of non-basmati rice exports to revive the rice industry in India. He added that granaries were brimming with 540 lakh metric tonnes of non-basmati rice stocks from previous years, even before a bumper harvest would add to more volumes in October.

MEP for onion also lifted

The Centre has also lifted the MEP of $550 per tonne for onion. The move will help the onion growers in poll-bound Maharashtra to sell their produce to exporters at higher prices. The government had previously fixed $550 per tonne as the minimum export price (MEP), which essentially meant that farmers could not sell their produce overseas lower than this rate.