In a major move aimed at boosting the export of basmati rice, a premium GI (Geographical Indication) variety of India, the government has decided to remove the minimum floor price for its export. This decision is expected to result in better returns for farmers.
According to the Ministry of Commerce and Industry, the removal of the current minimum export price (MEP) of $950 per metric tonne (MT) will facilitate the issuance of registration-cum-allocation certificates (RCAC) for basmati rice exports.
The Agricultural and Processed Food Products Export Development Authority (APEDA) will continue to monitor export contracts to prevent any unrealistic pricing of basmati rice and ensure transparency in export practices, the ministry added.
This decision was taken in response to ongoing trade concerns and the availability of adequate rice supplies domestically.
The floor price of $1,200 per MT was initially imposed in August last year as a temporary measure to control rising domestic rice prices caused by supply shortages. It was also aimed at preventing the misclassification of non-basmati rice as basmati rice during exports, following the export ban on non-basmati white rice. After consultations with trade bodies, the government later lowered the floor price to $950 per MT in October 2023 due to concerns that high export prices were hurting shipments.
Satish Goel, president of the All-India Rice Exporters’ Association, welcomed the decision, stating that removing the floor price will enable India to export basmati rice in larger quantities, thereby ensuring better returns for farmers.
Industry experts have noted that there is significant demand in the international market for basmati rice varieties priced around $700 per tonne.
India’s total exports of basmati rice reached $5.9 billion in 2023-24. In the previous fiscal year, basmati rice exports were valued at $4.8 billion, with a volume of 45.6 lakh tonnes.
