Basmati Rice Growers Disappointed as Minimum Export Price Maintained
The Central Government’s decision to maintain the Minimum Export Price (MEP) on Basmati rice at $1,200 per tonne has left Basmati rice growers in a difficult situation. As a result, the prices of Basmati 1509 and 1718 varieties have fallen by Rs 300 per quintal for both top-quality and slightly lower-quality grain since Friday.
Disappointment among Farmers
- Basmati growers who have been contributing to Punjab’s shift from water-intensive paddy crops to the shorter-duration Basmati variety are disappointed with the government’s choice.
- The rates have already come down by 500 to 600 per quintal last week.
Government’s Decision on MEP
The Central Government imposed the MEP on Basmati rice on August 25, causing concern among exporters in Punjab and Haryana, the major Basmati rice-exporting states. Union Minister Piyush Goyal indicated a lower MEP of $850 per metric tonne after receiving frequent requests from exporters.
Continuation of Registration-Cum-Allocation Certificate
The Department of Food and Public Distribution under the Ministry of Consumer Affairs and Food and Public Distribution issued a circular on Saturday stating that the arrangement for registration-cum-allocation certificate for Basmati rice may continue beyond October 15 till further order.
Reasons for Price Decline
The decline in Basmati rice prices can be attributed to various factors, including the increased MEP, adverse weather conditions, bulk arrivals in recent days, and international tensions such as the Israel-Palestine standoff.
Impact on Exporters
Exporters argue that the high MEP will further harm the industry. They believe that no export orders are likely to be executed at the high MEP, leading to increased orders for Basmati rice from Pakistan instead of India.
Concerns for Farmers
The high MEP may negatively impact farmers, especially those who expanded Basmati cultivation in flood-affected states like Punjab. Additionally, traders may be reluctant to purchase from farmers when they cannot execute export orders due to the high MEP.
Export Statistics
Basmati export data from April to July showed that around 71.40% of exports fell within the price bracket of $700-1,200 per metric tonne. Indian Basmati rice exports are economically significant, with 4.5 million tonnes exported last year, valued at approximately Rs. 38,000 crore.
Summary: The Central Government’s decision to maintain the Minimum Export Price (MEP) on Basmati rice at $1,200 per tonne has disappointed Basmati rice growers. The prices of Basmati 1509 and 1718 varieties have already fallen, causing concern among farmers. Exporters argue that the high MEP will harm the industry and lead to increased orders for Basmati rice from Pakistan. The high MEP may negatively impact farmers and traders may be reluctant to purchase from them. Basmati rice exports are economically significant for India, with 4.5 million tonnes exported last year.
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