Govt may soon scrap basmati rice MEP

The government may soon abolish minimum export price (MEP) on basmati rice to boost exports.

"We are thinking of abolishing MEP on basmati rice. A notification in this regard will be issued soon," a senior Commerce Ministry official said.

Earlier this year, the government had lowered MEP on basmati rice to USD 700 a tonne from USD 900 a tonne to make it more competitive in the global market.

Exporters said they are selling basmati rice at an average price of USD 950 a tonne in the overseas market.

If the MEP on basmati rice is abolished, the aromatic rice will be treated on par with non-basmati rice, which is currently been exported in the range of USD 375-400 a tonne, they said.

The country has shipped 4.25 million tonnes of non- basmati rice since the export ban on the commodity was lifted in September, 2011, according to the industry data.

At present, there is no MEP fixed on non-basmati rice.

India ships the premium aromatic rice variety to Gulf countries, including Saudi Arabia, Iran, Kuwait and Yemen.

Total basmati rice exports stood at 2.4 million tonnes in the 2011-12 fiscal, according to industry data.

India, the world's second biggest producer of rice, had harvested 103.41 million tonnes in the 2011-12 crop year (July-June).