Govt mulls easing rice export curbs

By Sandip Das

Given the surplus rice stocks and robust kharif crops, the government is likely to announce measures to relax restrictions on rice exports imposed last year soon.

Sources told FE that basmati rice MEP of $ 950/tonne is expected to be reduced while a proposal is being considered for imposing a fixed fee of $ 90/tonne on non-basmati rice shipments against current practice of 20% export duty on par-boiled rice.

Food minister Prahlad Joshi is scheduled to meet the rice exporters on Monday on the issue. A group of ministers will also meet shortly on lifting the restrictions on rice shipments after considering the demand-supply and price situation.

To curb rise in prices and improve domestic supplies, in September last year the government had banned exports of white rice and subsequently had imposed a 20% export duty on parboiled rice.

However, India stil allows white rice exports for meeting the food security needs of the countries and on the basis of their request.

A minimum export price (MEP) of $ 950/tonne was imposed last year on aromatic long-grain Basmati rice which is likely to be reduced to $ 800 or $ 850/tonne, sources said. However exporters have demanded MEP on aromatic rice to be reduced to $ 700/tonne.

Traders said that the mandi price of early harvested 1509 basmati paddy varieties has declined to Rs 2500/quintal from Rs 3000/quintal prevailed a year ago.

Exporters said that the arrival which is expected to commence by the end of the month is likely to pull down prices of premium Pusa 1121 variety paddy, which has more than 70% share in exports, below the last year level’s of Rs 4000/quintal.

“Because of higher MEP, we are losing our competitive edge in the global market of basmati rice exports against our key competitors Pakistan as they follow a lower MEP of $ 750/tonne and prospects of bumper crops would pull down domestic prices hitting farmers,” Ranjit Singh Jossan, vice president, basmati rice millers and exporters association of Punjab, told FE

Retail rice prices rose by 10.89% in July and had been rising in double digits since October, 2022.

At present, paddy transplanting is largely completed and at 39.42 million hectare, is up 4.4% year-on-year (y-o-y). Going by a five-year average, about 98% of paddy sowing has been completed so far.

The United States Department of Agriculture (USDA) in its August, 2024 crop outlook has stated that India’s rice production in 2024-25 projected at a record 138 million tonne (MT), against the agriculture ministry’s estimated rice production of 136.7 MT in 2023-24 crop year.

Meanwhile, following the meeting of state food secretaries, officials of the food ministry and Food Corporation of India on Thursday, the government has set a rice procurement target of 48.5 MT for the kharif crop 2024-25 (October-September) which is an increase of 5% compared to an procurement of 46.3 MT in 2023-24.

The FCI currently holds 43.57 MT — 32.61 MT of rice stocks and 10.96 MT of grain receivable from millers. The stock is against the buffer of 10.25 MT for October 1.

This article has been republished from The Financial Express.