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India to cut floor price for basmati rice exports, say sources

September 25, 2023
in Business
India to cut floor price for basmati rice exports, say sources
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India will cut the floor price for basmati rice exports in the coming days, sources familiar with the matter said, after millers and traders complained about a sharp drop in overseas sales of the premium aromatic grain.

India will lower the basmati floor price to $850 a metric ton, down from $1,200 a ton, to help millers and traders ship out the rice grade, said the sources, who didn’t wish to be identified as they are not authorised to talk to media.

Last month, India fixed the floor price, or the minimum export price (MEP), for basmati rice shipments at $1,200 a metric ton.

Authorities said the MEP was imposed to help New Delhi ensure that non-basmati rice was not exported as basmati rice.

In July, India surprised buyers by imposing a ban on the export of widely consumed non-basmati white rice, following a ban on broken rice exports last year.

“The decision to lower the basmati MEP would help farmers who were losing money on account of falling exports,” said Prem Garg, president of the Indian Rice Exporters Federation.

“The move will also help India retain its pre-eminent position in the global basmati rice market.”

Since basmati rice is not widely consumed in India, and the new season crop will start arriving in the market from next month, India would have faced a glut of the superior grade, Garg said.

“A large stockpile would have hammered prices and hurt farmers and India’s rice sector, so the move to lower the MEP will be quite helpful,” he said.

India and Pakistan exclusively grow premium, aromatic basmati rice. India ships out around 4 million tons of basmati rice to countries such as Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates and the United States.

“The MEP of $1,200 a ton was too steep, and that’s why most millers and traders were not able to export basmati rice,” said Vijay Setia, a leading exporter from the northern state of Haryana, one of India’s breadbasket states.

(Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times.)

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Copyright for syndicated content belongs to the linked Source : IndiaTimes – https://economictimes.indiatimes.com/news/economy/foreign-trade/india-to-cut-floor-price-for-basmati-rice-exports-say-sources/articleshow/103940360.cms

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