Pak to gain as Indian basmati exports dip

The country’s basmati exports may fall by 33 per cent this year, as the government made shipments expensive by imposing a cess of Rs 8,000 a tonne plus the high minimum export price (MEP), raising the prices for overseas buyers.

“This year, basmati exports are likely to fall to around 8 lakh tonnes from 12 lakh tonnes last year,” said former All India Rice Exporters Association President Gurnam Arora.

Arora, who is also the joint managing director of Kohinoor Foods, said, “While we offer basmati at $1,400-1,600 a tonne in the global markets due to the high MEP and duty, Pakistani exporters are selling basmati at $1,000 a tonne. The $500 difference will kill us.”

In India, Basmati’s MEP now stands at $1,200 a tonne. What is worrying is that the country has not been able to attract any European buyer in November, he said, adding that India’s customers have turned to Pakistan.

“Therefore, we urge the government to abolish the duty on exports. MEP should be made flexible and reviewed periodically by the Agricultural and Processed Foods Export Development Authority, taking into account the global scenario,” he said.

Besides, he said Pakistan has witnessed bumper crops and their basmati quality is also a bit better this year than that of India’s.

“Output in India may be around last year’s level, but quality has been dented a bit due to untimely rains in September in the major growing belts of Haryana and Punjab.” India exported around 12 lakh tonnes of basmati rice in 2007-08, whereas Pakistan shipped 7-8 lakh tonnes, he said.