Government removes floor price on basmati rice
In a recent policy shift, the Indian government has abolished the minimum export price (MEP) of USD 950 per tonne for basmati rice, a move expected to bolster export volumes and enhance farmer incomes. Commerce and Industry Minister Piyush Goyal announced that the MEP, which was previously reduced from USD 1,200 per tonne in October 2023, has now been completely removed. This decision is aimed at promoting international sales and supporting the basmati rice sector, while the Agricultural and Processed Food Products Export Development Authority (APEDA) will continue to monitor export contracts to prevent undervalued sales. Indias basmati rice exports reached USD 5.9 billion in 2023-24, up from USD 4.8 billion the previous year.
The government on Friday said the USD 950 per tonne minimum export price (MEP) on basmati rice has been removed. Commerce and Industry Minister Piyush Goyal said the move will help boost exports and increase farmers' income.
"It has been decided to remove current minimum export price (MEP) of USD 950 MT for issuing Registration-cum-Allocation Certificates (RCAC) for export of Basmati Rice," according to a communication from the Department of Commerce.
The APEDA (Agricultural and Processed Food Products Export Development Authority) was requested to take immediate action to implement the decision.
However, it added that APEDA will closely monitor export contract for any non-realistic prices for basmati exports.
Earlier in October last year, the government reduced the floor price for basmati rice exports to USD 950 per tonne from USD 1,200 per tonne amid concerns that higher prices were hurting outward shipments.
The government on August 27, 2023 decided not to allow exports of basmati rice below USD 1,200 per tonne to restrict possible "illegal" shipment of white non-basmati rice in the garb of premium basmati rice.
India's total exports of basmati rice stood at USD 4.8 billion in 2022-23 in terms of price, while in volume terms it was at 45.6 lakh tonne.
It was USD 5.9 billion in 2023-24.
As per the Foreign Trade Policy, APEDA is mandated to register all contracts for the export of basmati rice and then it issues registration-cum-allocation certificate for the export of basmati rice.
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