On Friday, the Indian Government announced that the minimum export price (MEP) of USD 950 per tonne for basmati rice has been lifted. According to Piyush Goyal, Minister of Commerce and Industry, the goal of this move is to boost exports and increase farmer incomes. The current MEP of USD 950 per metric ton for the issuance of Registration-cum-Allocation Certificates (RCAC) for exports of basmati rice has been eliminated, according to a communication from the Department of Commerce.
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APEDA Monitoring Basmati Rice Exports
This directive will be implemented promptly by the Agricultural and Processed Food Products Export Development Authority (APEDA). To make sure export contracts represent fair prices for basmati rice, APEDA will nevertheless keep a careful eye on them. The purpose of this measure is to stop any possible undervaluation or misuse in export agreements.
The government lowered the floor price for exports of basmati rice from USD 1,200 per tonne to USD 950 per tonne in October of last year. Concerns that rising prices were having a detrimental effect on export volumes led to this reduction. This decision was made as a component of larger initiatives to sustain competitive pricing in global markets and assist the agriculture industry.
India's Basmati Rice Exports
The government decided on August 27, 2023, to prohibit exports of basmati rice for less than USD 1,200 per tonne. This prohibition was put in place to stop the unauthorized export of white non-basmati rice that was passed off as premium basmati rice. Such actions were required to protect the integrity of India's rice exports and assure adherence to trade laws.
In the fiscal year 2022-2023, India's total exports of 45.6 lakh metric tons of basmati rice were valued at USD 4.8 billion. 2023-2024 saw a rise in the value of exports of basmati rice to USD 5.9 billion. These figures highlight the significant contribution of basmati rice exports to India's economy, emphasizing the importance of maintaining favorable export conditions.
The removal of the MEP is expected to significantly increase India's basmati rice exports. By making Indian basmati more competitively priced on the global market, demand is expected to rise, benefiting both exporters and farmers alike.
This policy change demonstrates the government's commitment to boosting agricultural exports and improving farmers' livelihoods. India hopes to strengthen its position as the world's leading exporter of high-quality basmati rice by removing the trade barrier.
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