Govt Scraps Minimum Export Price Thresholds on Onion, Basmati Rice
The Indian government has removed the Minimum Export Price (MEP) for both basmati rice and onions and reduced export duty on onions from 40% to 20%, effective from September 14. These measures aim to boost exports and enhance farmers’ income, particularly ahead of assembly elections in Maharashtra and Haryana. Basmati rice producers in Haryana and Punjab are expected to benefit from this move, with the export floor price now lifted from $950 per tonne.
The government on Friday scrapped the minimum price thresholds for onion and basmati rice to boost outbound shipments and enhance farmers’ income.
The government also halved export duty on onion to 20 per cent from 40 per cent. The duty cut is effective from September 14. The 40 per cent export duty had been in place since May 4.
The decisions, including removal of the Minimum Export Price (MEP) on both onion and basmati rice and cut in the export duty, came ahead of assembly elections in Maharashtra and Haryana.
Haryana along with Punjab is the major producer of basmati rice. According to a communication from the Department of Commerce, the $950 per tonne minimum export price 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 the current minimum export price (MEP) of $950 MT for issuing Registration-cum-Allocation Certificates (RCAC) for export of Basmati Rice,” the communication said.
The APEDA (agricultural and processed food products export development authority) has been requested to take immediate action to implement the decision and it will also closely monitor export contracts for any non-realistic prices for basmati exports.
In October 2023, the government reduced the floor price for basmati rice exports to $950 per tonne from $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 $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 $5.9 billion in 2023-24.
During the 2022-23 fiscal, basmati rice exports stood at $4.8 billion in terms of price, while in volume terms it was at 45.6 lakh tonnes.
As per the Foreign Trade Policy, APEDA is mandated to register all contracts for the export of basmati rice and issue the registration-cum-allocation certificate for the export of basmati rice.
The basmati crop is grown in kharif (summer-sown) season.
In another farmer-friendly decision ahead of the assembly election in Maharashtra, the directorate general of foreign trade (DGFT) removed the MEP on onion with immediate effect.
Source Link : https://www.outlookbusiness.com/news/govt-scraps-minimum-export-price-thresholds-on-onion-basmati-rice
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