Exports of non-basmati white rice will not be impacted by the minimum $490 per tonne export price, or roughly ₹41/kg, as some in the trade had feared. Some states, like Odisha, Telangana, and Telangana, have declared bonuses for farmers who earn more than the ₹2,320 quintal minimum support price (MSP). However, exporters stated that a limit placed by the States on purchases from farmers will guarantee that there will not be any issues in shipping the foodgrain.

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Rice Procurement

According to Mukesh Jain, president of The Rice Exporters Association (CG), “the market rate of paddy was as low as ₹18/kg before the MEP was announced, and it has increased to ₹22.10/kg.” According to him, farmers with higher paddy productivity must sell their excess in the market because Chhattisgarh has set a cap of 21 quintals per acre at which it will purchase the crop from farmers for €3,100 per quintal.

According to a trade analyst, the majority of farmers in Chhattisgarh are small and medium-sized, meaning there may not be as much surplus to sell on the open market. The analyst stated, “The (bonus) policies are targeted at small and medium farmers.”

According to Jain, Chhattisgarh produces an adequate amount of rice and used to export 30 lakh tonnes (lt) annually prior to the imposition of the ban in July 2023. He stated Odisha had already declared its intention to adopt the Chhattisgarh model (by imposing a cap per acre).

Strategy To Procure Rice

Telangana has made it clear that only the superfine varieties will be eligible for the ₹500/quintal premium; the state has stated that it will buy paddy at approximately ₹2,800/quintal at the MSP for the common variety.

Leading Kakinada rice exporter claimed that port-based rice millers in Andhra Pradesh—where the government has not yet declared any bonuses—will benefit.

Calculations show that if exporters purchase paddy at MSP, the export price will surpass ₹41/kg. The price drops to ₹34–35/kg when converted to rice (67 kg of rice from 100 kg of paddy). Inland freight (₹2/kg) and port handling charge (₹2/kg) are extra costs of ₹4/kg. Exporters will save ₹1/kg on inland freight when buying paddy from Andhra Pradesh. Moreover, the exportable FoB price will be approximately ₹41/kg after profit is added.

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REFERENCE- thehindubusinessline.com