India is set to lower the floor price for basmati rice exports in response to concerns raised by millers and traders regarding a significant drop in overseas sales of this premium aromatic grain. According to sources familiar with the matter, India’s decision to reduce the floor price aims to support millers and traders in shipping out this prized rice grade.
India’s basmati floor price will be adjusted to $850 per metric ton, a substantial decrease from the previous $1,200 per ton. The sources, who chose to remain anonymous as they lack authorization to speak to the media, confirmed this move.
In the previous month, India had set the floor price, also known as the Minimum Export Price (MEP), for basmati rice shipments at $1,200 per metric ton. This step was taken to ensure that non-basmati rice would not be exported under the guise of basmati rice.
Earlier this year, India had imposed a surprising ban on the export of widely consumed non-basmati white rice. This decision followed a similar ban on broken rice exports last year. These measures aimed to maintain the authenticity of basmati rice in international markets.
Experts believe that the reduction in the MEP will prevent a potential oversupply of basmati rice, which is not commonly consumed in India. With the new season crop arriving next month, India could have faced a surplus of high-quality basmati rice, which might have led to a price drop that would negatively impact farmers and the country’s rice sector.
Rajesh Garg, an industry expert, commented, “A large stockpile would have hammered prices and hurt farmers and India’s rice sector, so the move to lower the MEP will be quite helpful.”
India and Pakistan are known for exclusively cultivating premium aromatic basmati rice. India, in particular, exports approximately 4 million tons of basmati rice to various countries, including Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates, and the United States.
Vijay Setia, a prominent exporter from the northern state of Haryana, one of India’s major rice-producing regions, remarked, “The MEP of $1,200 a ton was too steep, and that’s why most millers and traders were not able to export basmati rice.”
India’s decision to lower the floor price for basmati rice exports reflects the country’s commitment to maintaining its dominance in the global basmati rice market. By addressing concerns and potential oversupply issues, this adjustment is expected to benefit both the industry and farmers while ensuring the premium quality of Indian basmati rice in international markets.
For more updates stay tuned to FELA News!
Source: The Economic Times