Indian Government puts Basmati rice under minimum export price, following curbs to non-Basmati

livus, 8 months ago

More coverage: India imposes curbs on basmati rice exports; contracts with value below $1200 a ton temporarily halted: Govt notification

Via @mwalimu

livus, 8 months ago

From the article:

Mint had first reported on 23 August that the government was mulling imposing a minimum export price (MEP) on non-basmati shipments to stop exporters falsely labelling shipments as those of basmati rice, and weighing a 20% export duty on non-basmati parboiled rice.

As per a finance ministry notification issued late Friday, the export duty on parboiled rice will be applicable with immediate effect and remain valid till 15 October.

The objective is to slow down or delay shipments amid a 13.84% on-year decline in Rabi rice production and poor 2023-24 Kharif crop prospects.

The agriculture ministry in its third crop estimate said rice production during the Rabi season of 2022-23 was 15.9 million tonnes against 18.5 mt in the previous season.

By 15 October, the government will have a fair idea about expected Kharif rice production, according to trade sources.

Farmers transplanted paddy or rice till 25 August in the current Kharif season across 38.4 million hectares, 4.4% more than the same period last year. Monsoon till date remains deficient by 7% with East and North-East India, a major rice growing region, leading the shortfall by 17%.

A commerce ministry order reviewed by Mint said the new regulations on basmati exports come after “credible information" that non-basmati rice was being shipped out using export provisions that apply only to the aromatic basmati variety.

“There are credible field reports regarding misclassification and illegal export of non-basmati white rice, and it has been brought to the notice of government that the non-basmati white rice, the export of which has been prohibited, is being exported in the garb of basmati rice."

Therefore, “it has been decided that APEDA should introduce additional safeguards for registration of contracts for export of basmati rice." the commerce ministry said in a letter to the Agricultural and Processed Food Products Export Development Authority (APEDA), a regulatory body, on Saturday.

Basmati exports contracted above a price value of $1200 per tonne are allowed to be exported as usual....

As of now, the free-on-board (FOB) price of unadulterated basmati rice is hovering at $1,100-1,300 per tonne depending on varieties, trade sources said.

Asian rice prices surged to a nearly 15-year high earlier this month, driven by rising demand, production disruptions in major growers such as Thailand, and fears of possible adverse effect of El Nino. In July, the FAO rice price index stood at 129.7 points, the highest value since September 2011, and an increase of 19.7% from a year ago.

With Indian rice still cheaper than other varieties, there have been strong demand for the former resulting in record exports in FY22 and FY23, which is expected to slow down after the latest developments.

In the first three months of the current fiscal, India exported Basmati, the premium variety, to 75 countries. In nine of these countries, the price was less than $1,000 per tonne, constituting 4% of the total export quantity, a government official told Mint earlier.

During 1 April to 17 August, India’s basmati rice exports rose 9.35% year-on-year to 1.86 mt. In the case of parboiled rice, exports by India have gone up 21.18% to 3.29 mt year-on-year in the same period. Last fiscal, of the total 22 million tonne rice India sold overseas, basmati and parboiled shipments comprised 4.56 mt and 7.45 mt, respectively, as per data from the commerce ministry.