India cuts floor price for basmati rice exports to revive shipments (updated)

GRM Overseas

26/10/2023 15:32

(Adds details, exporter's comment)
    By Mayank Bhardwaj and Rajendra Jadhav
       NEW DELHI, Oct 26 (Reuters) - India has cut the floor
price for basmati rice exports to $950 per metric ton from
$1,200, a government source told Reuters on Thursday, after
farmers and exporters complained it was damaging the trade by
stalling shipments.
        India had imposed a $1,200 per ton minimum export price
(MEP) on basmati rice shipments in August to keep a lid on local
prices ahead of key state elections.
  
        The MEP was 
    expected
     to be cut with the arrival of the new season harvests, but
the government said on Oct. 14 it would 
    maintain
     it until further notice, angering farmers and exporters who
said the new season's rice crops had led to a drop in domestic
prices.
  
        Authorities later said they were actively 
    reviewing
     the MEP.
  
        "The reduction will reinstate competitiveness of Indian
basmati rice shipments at the global markets. Exporters are now
working towards regaining the lost ground," said Atul Garg,
managing director at GRM Overseas  GRMO.NS , a leading exporter.
  
        India and Pakistan are the leading exporters of basmati
rice. New Delhi exports more than 4 million metric tons of
basmati - the premium long-grain variety famed for its aroma -
to countries such as Iran, Iraq, Yemen, Saudi Arabia, the United
Arab Emirates and the United States.
  
        India is set to produce more basmati rice this year than
the previous year as farmers have expanded their cultivation
areas following record returns last year, said a dealer with a
global trade house.
  
        However, farmers were struggling to sell paddy because
millers and traders stopped coming to key wholesale markets to
make purchases, he said.
  
        "Now they will start buying paddy, which will help
stabilize paddy prices that have corrected nearly 20% in the
last two months," he added.
  
        India, the world's biggest rice exporter, has also 
    curbed
     exports of non-basmati rice varieties.
  

 (Reporting by Mayank Bhardwaj in New Delhi and Rajendra Jadhav
in MUMBAI;
Editing by Andrew Cawthorne and Deborah Kyvrikosaios)
 ((rajendra.jadhav@thomsonreuters.com ; +91-22-68414378 ; https://twitter.com/Rajendra1857))