Government Sets $1,200 Per MT Ceiling For Basmati Rice Exports

This move has been undertaken to curb possible illegal exports of white non-basmati rice being sold in the name of premium basmati rice. 

In the recent development in the rice export ban, the government of India has decided to not allow exports of basmati rice below the value of $1,200 per tonne. This move has been undertaken to curb possible illegal exports of white non-basmati rice being sold in the name of premium basmati rice. 

The commerce ministry informed on Sunday that it has told the trade body APEDA (Agricultural and Processed Food Products Export Development Authority) to not register contracts below the $1200 per tonne limit. As per the ministry’s statement, existing contracts below the specified limit have been kept in abeyance and a decision has been taken to set up a committee under the chairman of APEDA to evaluate the way to proceed ahead, reported PTI.

The government aims to keep a tab on the retail prices of rice through this move. Lately, the government has been taking multiple measures to ensure supply availability at the domestic level. Last year in September, the government banned the export of broken rice, and last month it levied restrictions on non-basmati white rice. The government further added a 20 per cent export duty on par-boiled non-basmati rice on August 25. With this move, India has restricted all varieties of non-basmati rice.

According to the ministry statement, the APEDA has been instructed to put additional measures in place to avoid the export of non-basmati rice masked under the basmati rice category. Further, the trade body has been instructed to register basmati export contracts worth $1,200 per MT and above, for the issue of registration-cum-allocation certificate (RCAC). The contracts below the ceiling price will be evaluated by the APEDA chairman-led committee.

Further, the ministry stated that there has been a huge variation in the contract price of basmati exports, with the lowest contract price at $359 per MT and the average export price at $1,214 per MT in the current month. The commerce ministry therefore asked the committee to submit a report within one month, on the basis of which a decision will be taken on lower-price exports of basmati. 

Notably, India’s total basmati exports stood at $4.8 billion in 2022-23, while the total volume stood at 45.6 lakh tonne. The exports of non-basmati varieties were worth $6.36 billion with a volume of 177.9 lakh tonne in the previous fiscal year. The total rice production in the country increased to 135.54 million tonne in the 2022-23 crop year (July to June) compared to 129.47 million tonne in the previous year. 

The ministry further noted that rice exports have been on the higher end during the current year despite the restrictions on some varieties. About 7.33 million tonne of rice (except broken rice, which were prohibited) were exported from India, up by 15 per cent from 6.37 million tonne of rice exported during the same period in the previous year. 

Indian rice is cheaper in comparison to international prices, thereby adding to the demand for Indian rice, as such leading to record exports during the last two years, 2021-22 and 2022-23, the ministry added. It informed that it received valid reports about misclassification and illegal export of non-basmati white rice, the export of which has been banned since July 20 this year.