Amit Shah rejects exporters’ demand to reduce Basmati’s minimum export price

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The government has decided to continue the minimum export price (MEP) of basmati rice at $1,200/tonne till further order, rejecting the exporters’ demand to reduce it to around $900/tonne. Exporters have termed the decision as unfortunate.

The decision to continue the current MEP was taken by a committee of ministers, headed by Home Minister Amit Shah, and was conveyed on Saturday by the Food Ministry to the Commerce Ministry and APEDA, sources said.

“The present arrangement for registration cum allocation certificate for Basmati Rice may continue beyond October 15, 2023 till further orders,” the food ministry said in the communication.

The government’s agri export promotion body, APEDA, from August 28 implemented the Commerce Ministry’s direction by making changes in the online application filing system after which no Basmati export contract is getting registered below $1,200/tonne. It is similar to fixing a minimum export price (MEP) but leaves scope to tweak at any point without going through the normal procedure.

However, at a virtual meeting of Basmati rice stakeholders on September 25, it was said to be agreed that the Basmati rice export price would see a downward revision to $850/tonne. Earlier, Punjab BJP President Sunil Kumar Jakhar had also pressed the Commerce Ministry to lower the MEP to help growers, the source said.

“It is unfortunate when trade decision is controlled by the food ministry. As for Basmati rice, half of its production goes for exports while the remaining half is consumed domestically. Since it is sold at a premium, it has no link with food security, and farmers in the Geographical Indications region grow it mainly for export,” said a former head of an exporters’ body.

Demanding the MEP should be at a realistic price of $950-$1,000 a tonne, Vijay Setia, a former president of All India Rice Exporters Association, last month said that the importers might reduce the quantity if rates went beyond the prices that consumers were ready to pay.

According to APEDA data, the average price realised by basmati exporters was $1,048.82/tonne in October 2022, $1,016.29 in November 2022, $998.16/tonne in December 2022, and $1,045.21/tonne in January 2023. Maximum arrivals of basmati were recorded during these four months of the season (October-January).