Govt plans $900 export price for premium non-basmati

Export ban likely to be partially lifted by October 1.

The government is likely to fix the minimum export price (MEP) on shipments of premium non-basmati rice at $900 a tonne, on a par with the basmati rice, in the upcoming meeting of the empowered group of ministers (EGoM). It is also considering partial lifting of the two-year-old ban on export of non-basmati rice.

The government is looking at relaxing the ban on particular varieties of non-basmati rice such as Sugandha and Sharbati from northern India and Pooni, Sona-Masuri, Matta from the southern part of the country. These varieties enjoy very high demand in the US, the UK and West Asia.

“There is a strong case for lifting the ban, only partially, on the premium variety of non-basmati rice because it is in demand overseas. Moreover, here, there is not much demand for such rice. Hence, there is no question of this affecting the common man or the normal ration system. The MEP for non-basmati would be decided based on the prevailing international prices,” a senior official told Business Standard. Officials in the agriculture ministry also said that the exports could be permitted from October 1.

Both the ministries of commerce and industry as well as agriculture have discussed the matter, and a final decision would be taken by the EGoM, headed by Finance Minister Pranab Mukherjee, that is expected to meet next month.

“The MEP should be fixed at around $900 a tonne at par with that of basmati rice as that would then ensure that only the premium or the expensive range is being exported and not the ordinary ones. There is a growing demand for such varieties, particularly Pooni and Sona Masuri, wherever there is a heavy concentration of Indian population,” said A K Gupta, head – cereals division, Agricultural and Processed Food Products Export Development Authority (Apeda).

The ban on export of non-basmati rice was imposed in April 2008 to tame the spiralling rate of inflation at that time. Earlier this week, commerce secretary Rahul Khullar had said that the government is considering allowing exports of certain variety of rice depending on the quantum of the summer crop.

At present, four to five million tonnes of premium variety non-basmati rice is produced annually. “Out of this if one million tonne is exported then I don’t think it would affect the domestic market. Continuation of the ban should be determined on the basis of price,” said Vijay Setia, president, All India Rice Exporters Association.

He also said that a two-year blanket ban on non-basmati rice exports has put competitors like Pakistan, Vietnam and Thailand at an advantageous position who have not only increased their shipments but have been selling at a lower price thereby grabbing some of India’s traditional markets.