Exporters are raising concerns about the government’s potential decision to extend the minimum export price (MEP) for basmati rice beyond October 15. This comes after the temporary suspension of shipments below US$1,200/tonne.
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Amidst the temporary suspension of shipments below US$ 1,200/tonne for basmati rice exports, exporters are expressing concerns regarding the government’s contemplation of extending the minimum export price (MEP) beyond October 15. Their concerns stem from the potential disruption this extension might cause to the procurement of the next season’s crop.
According to multiple exporters, the prices of basmati exports tend to rise during the months of August and September. This period is seen as the conclusion of the season, as the cultivation for the upcoming season (2023-24) begins on October 1.
“The government needs to reduce MEP to a realistic level of US$ 850/tonne so that farmers prices realisation are not hit because of decline in exports”, stated Vijay Setia, ex-chairman, All India Rice Exporters Association (AIREA) and Karnal-based basmati rice exporter.
Basmati rice is mostly grown in Punjab, Haryana, western Uttar Pradesh, Rajasthan, Jammu and Kashmir, and Uttarakhand. Recognized for its aromatic allure and elongated grains, this rice variety commands a premium on the global market. Of the projected annual production of 9 million tonnes (MT) of basmati rice, nearly half of this output is allocated for export.
In the previous fiscal year, the nation achieved exports of 4.56 million tonnes (MT) of basmati rice, generating a value of US$ 4.78 billion, with an average price of US$ 1,050 per tonne. According to an official from AIREA, over the last five years, the average export price for basmati rice has stood at US$ 975 per tonne.
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