Call for removal of basmati export floor price grows
Exporters urge removal of $950/tonne MEP for basmati rice, citing falling prices amid ample stocks and predicted bumper harvest. FY24 saw record 5.24 MT export valued at $5.83B. Domestic price drop to Rs 65/kg. Kharif 2024 yields 8 MT, 20% increase. KRBL expects strong export until March 2025. India dominates global aromatic rice market with 80% share, while Pakistan holds 20% in basmati rice exports.
Exporters have sought removal of the minimum export price (MEP) of $950/tonne for basmati rice to maintain the export momentum this fiscal, taking into account large stocks and bumper harvest forecast.
They said prices of the aromatic and long grain have gone down in the domestic as well as global markets, so the government needs to remove the MEP to sustain last year’s record export. In FY24, India exported a record 5.24 million tonne (MT) of aromatic rice valued at $5.83 billion.
Trade sources said the export price of basmati has fallen by around $100/tonne to $850. Domestic prices have declined by Rs 10/kg to Rs 65 because of higher stocks compared to previous years.
“Importing countries have created a huge stock of basmati rice last fiscal and carry forward stocks have been higher because of bumper output last kharif season,” Vijay Setia, managing director, Chaman Lal Setia Exports, a leading exporter, told FE.
Trade sources said that in the kharif season of 2024, the country has produced 8 MT of aromatic rice, which is about 20% higher than the previous year. Around 1.5 MT is consumed domestically. Sources said around 1.5-2 MT of basmati rice is carried forward into the current fiscal.
With expectation of another bumper harvest due to the prospects of a ‘normal’ monsoon rains, domestic stocks are expected to rise further bringing down the prices.
Akshay Gupta, head-bulk exports, KRBL, a leading basmati rice exporter, said despite record exports last fiscal, prices have softened starting January-February. “April and May have seen good demand coming from various export markets. We are anticipating good export volumes until March 2025,” Gupta said.
In October last year, the government reduced the minimum export price for basmati rice to $950/tonne from $1,200/tonne.
Geographical Indication-tagged basmati rice is grown in 70-odd districts in Punjab, Haryana, western Uttar Pradesh, Jammu & Kashmir and Uttarakhand.
The aromatic and long grain rice commands a premium in the global market. India has a share of around 80% in the world aromatic rice market, while Pakistan holds a share of around 20% in basmati rice exports.
Source Link : https://www.financialexpress.com/policy/economy-call-for-removal-of-basmati-export-floor-price-grows-3505384/
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