India May Cut Floor Price for Basmati Rice Exports: Report – Gulf Insider

India is reportedly planning to cut the floor price—or minimum export price (MEP)—it has set for basmati rice exports, following complaints from farmers and exporters that it was damaging trade.

The government is likely to bring down the floor price for basmati rice to $950 per metric tonne from $1,200 per metric tonne, Reuters reported, citing unnamed government and industry sources.

India imposed a $1,200 per ton floor price on basmati rice shipments in August, apparently to keep a lid on local prices ahead of key State elections.

The floor price was expected to be cut with the arrival of the new season harvests, but the government said on October 14 it would maintain it until further notice, angering farmers and exporters who said the new crop had led to a drop in domestic prices.

Authorities later said they were actively reviewing the floor price.

India and Pakistan are the only growers of basmati rice. New Delhi exports more than 4 million metric tons of basmati – the premium long-grain variety famed for its aroma – to countries such as the UAE, Saudi Arabia, Iran, Iraq, Yemen, and the US.

“The decision to lower the MEP would help both farmers and exporters who suffered on account of the $1,200 MEP,” the Reuters report said, quoting Prem Garg, president of the Indian Rice Exporters Federation.

The floor price hit the trade so severely that exporters stopped buying the rice from farmers, he said.

The decision would help resume trade in basmati rice, said Vijay Setia, a leading exporter from the northern state of Haryana.

India, the world’s biggest rice exporter, has also curbed exports of non-basmati rice varieties.

Comments