Basmati exports on credit banned

Basmati exports are likely to be affected temporarily by a ban on their shipment on credit. The Agricultural and Processed Food Products Export Development Authority (Apeda) under the commerce ministry has restricted exporters from shipping basmati on credit, known as document against acceptance in trade parlance.

However, exports covered either by bank guarantee or Export Credit Guarantee Corporation can be executed.

"Indian exporters used to export basmati in good faith after negotiating a final price. But importers have sometimes refused to accept the consignments, leading to re-negotiated prices. Apart from that, payment was sometimes inordinately delayed," said Gurnam Arora, joint managing director, Kohinoor Foods. Apeda estimates India's basmati rice exports jumped 10 per cent to 1.55 million tonnes during April-July from the same quarter a year ago. In value terms, however, exports fell to $1.21 billion (Rs 8,140.06 crore) from $1.32 billion (Rs 8,399.39 crore).

Earlier importers demanded shipment of basmati on credit, a facility they enjoyed with Pakistan, the other major exporter of the aromatic rice. An Apeda official forecast India's basmati exports would rise 5 per cent by volume in 2016-17. Apeda has ordered registration of exporters for shipment of basmati.