Minimum export price of Basmati rice: Exporters up in arms against govt move

By Anju Agnihotri Chaba

Exporters of agricultural commodities criticised the Centre’s recent decision to fix the minimum export price (MEP) of Basmati rice at $1,200 per tonne. They claimed that they would lose business if the MEP was more than $850 per tonne.

According to exporters, around 85 per cent of exported Basmati costs below $1,000 per tonne. India is the largest exporter of Basmati rice, a staple diet in Arab nations.

Exporters said they have already committed to several large Basmati rice consignments in the range of $850 to $900 per tonne. Besides, many more contracts are registered with the Agricultural and Processed Food Products Export Development Authority (APEDA).

The exporters have sought a meeting with the Commerce minister and APEDA chairman to discuss the issue.

The Union government issued a notification fixing the MEP for Basmati rice on August 25, without any apparent consultation with stakeholders.

“The industry leaders are unable to decipher the government’s motives while fixing MEP… to restrict the export of a free tradable commodity which has huge export orders from among the Arab countries…” said an exporter, while pointing out that only four million tonnes of Basmati rice are exported against the production of 125 million tonnes of Parmal varieties (non-Basmati), which are meant for Public Distribution System (PDS) procurement or for maintaining buffer stocks.

“Our several export orders were already fixed before this notification and they were below $1,200 per tonne. In such a condition, how will we be able to sell… when the contract rate is lower than the new rate fixed in the notification,” asked another exporter, adding that if they are not able to meet the orders then India would be labelled as an unreliable commodity trading partner.

“The present Basmati 1509 paddy rate is average of Rs 3,200 per quintal and when transformed into Creamy Sella, parboiled rice, which is one of the variants of 1509 Basmati, it costs around Rs 6,300 per quintal and then is exported at around $900 per tonne Free On Board (FOB),” said Ashok Sethi, director of the Amritsar-based Punjab Rice Millers & Exporters Association, adding that this parboiled rice variety is mostly exported to the Middle East but the rate is still lower than the MEP of $1,200 per tonne mentioned in the notification.

The government must heed the suggestions of all stakeholders before taking such decisions that have far-reaching consequences on our credibility, he added.

This article has been republished from The Indian Express

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