Basmati rice exports decline sharply following MEP implementation

The government’s recent imposition of the minimum export price (MEP) of US$1,200 per tonne until October 15, has led to a drastic decrease in the exports of high-value basmati rice.

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The imposition of the minimum export price (MEP) by the government on high-value basmati rice has caused a steep decline in its exports. The government of India had recently halted all basmati rice shipments below US$ 1200/tonne till October 15. Agricultural and Processed Food Products Exports Development Authority (APEDA), is currently approving only a small portion of the consignment above the prescribed MEP for shipment. 

About 75% of the country’s 4.5 million tonne annual basmati rice exports are shipped at an average value range of US$700-US$ 1000 per tonne. The average export price of basmati rice in the last five years has been US$ 975/tonne.

Vijay Setia, former President, of All India Rice Exporters Association (AIREA) said, “If the decision to impose a high MEP of $ 1200/tonne is not reversed soon, it would hit domestic paddy prices.” 

Aromatic and long-grain rice has a high demand in the global market. India accounts for about 80% share in the global basmati rice trade of 5.5 million tonnes (MT).

According to the Commerce Ministry officials, the MEP for basmati rice and the export duty on parboiled rice until mid-October would give the government the required time to get an estimate of the Kharif rice output for 2023-24. The ministry had earlier stated that it has received credible field reports of ‘misclassification and illegal export’ of non-basmati white rice whose shipment was banned from 20 July 2023.

Geographical Indication (GI) tagged Basmati rice is grown in the 70 districts across the states of Punjab, Haryana, western Uttar Pradesh, Rajasthan, Jammu & Kashmir and Uttarakhand.