New Delhi: In an apparent bid to keep the kitchen cost under check, the Central government has imposed a 20% duty on parboiled rice export and set a minimum export price (MEP) of $1,200 a tonne on basmati rice shipments.
The government’s move, market experts say, has been driven by the concern of spiralling prices of foodgrains and other kitchen items ahead of the elections in many states. As things stand, India has now curbed exports of all non-basmati varieties, which account for about 80% of its total rice shipments. The country accounts for about 40% of global rice trade.
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Commodity market analysts also believe that the government decided to impose the MEP on basmati shipments to stop aggressive exports by falsely labelling shipments as those of basmati rice. “The government had received complaints regarding misclassification and illegal export of non-basmati white rice. The non-basmati white rice, export of which has been prohibited with effect from 20th July 2023, was being exported under the HS codes of parboiled rice and basmati rice,” the commerce ministry said in a letter to the Agricultural and Processed Food Products Export Development Authority (APEDA).
The commerce ministry further asked APEDA to introduce addition checks for registrations of contract for export of basmati rice in view of tacit export of prohibited non-basmati white rice in the garb of basmati rice. “Contracts for basmati exports with the value of $1,200 per MT only and above should be registered for issue of registration-cum-allocation certificate,” the letter added.
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Officials said that the APEDA would set up a committee to enforce the curb on export of Basmati and parboiled white rice. Demand for basmati rice from countries in the Gulf Cooperation Council and European nations has risen 5-7% since the ban on non-basmati white rice exports, pushing up global prices.
Market exports said that as of now, the free-on-board (FOB) price of unadulterated basmati rice is hovering around $1,100-1,300 per tonne depending on the variety. Asian rice prices surged to a nearly 15-year high earlier this month, driven by rising demand, production disruptions in major growers such as Thailand, and fears of possible adverse effect of El Nino. In July, the FAO rice price index stood at 129.7 points, the highest value since September 2011, and an increase of 19.7% from a year ago.
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In the first three months of the current fiscal, India, which accounts for about 80% of basmati rice trade globally, exported the premium variety to 75 countries. In nine of these countries, the price was less than $1,000 per tonne, constituting 4% of the total export quantity, a government official said.
