Govt cuts minimum export price for basmati by $300/tn

The government has decided to cut the minimum export price (MEP) for basmati, Finance Secretary Ashok Chawla said today.

He said the decision to reduce the export floor price of the premium long grain rice was taken at the meeting of empowered Group of Ministers on food security late on Monday.

A senior government official had on Monday said that the ministers’ panel had decided to accede to the industry’s demand and cut the minimum export price of basmati to $800 a tonne from $1,100 tonne.

He had said lowering the basmati MEP would enable export of only premium rice varieties, and not impact prices or availability of common and more widely consumed varieties of rice.

Sowing of rice — the largest crop sown during the kharif season — is lagging nearly 6 million hectares on year due to poor rains, and there are concerns that even the standing crop may not fare too well due to moisture stress, leading to at least 20-25 per cent drop in output this season.

Though the government’s food grain stock position is currently comfortable, Agriculture Minister Sharad Pawar on Monday raised concerns that poor rain may hit food grain availability.

To ensure adequate grain supplies in the market, the ministers’ panel on Monday also approved continuation of duty-free import of wheat and decided to allow open market sale of wheat and rice from stocks held by the Food Corporation of India.