Centre may consider introducing minimum export price for rice exports

On Tuesday, food secretary Sanjeev Chopra explicitly denied any plans to restrict exports of parboiled rice, the only permitted variety of non-basmati rice for export

The Centre may be considering a minimum export price (MEP) for a host of specialty rice, including the basmati variety, to ensure that unscrupulous traders don’t ship excess quantities abroad.

India had banned export of all non-basmati white rice a few weeks ago to check domestic price rise but it allowed exports of basmati and parboiled rice.

Trade sources said though the ban impacted all varieties of non-basmati, some traders may be trying to ship in high quality non-basmati rice as basmati to cash in on the high global demand for the variety.

In this, MEP rice varieties such as sona masuri, matta and gobindo bhog may come under the ambit of the MEP along with the usual basmati.

However, some exporters said that this is just a rumour and there is no concrete move on this. Trade sources said the export price of sona masuri is around $680 per tonne on which an MEP of $800 could be imposed.

Similarly, the current export price of matta rice is around $570-600 per tonne on which an MEP of $700 may be imposed.

Gobindo bhog commands a price of around $1,400-1,500 per tonne in the international markets on which an MEP higher than this price could be invoked.

India exported around less than a per cent of these non-basmati specialty rice during the 2022-23 fiscal.

In the case of basmati rice, the current export price is around $1,150 per tonne on which an MEP of around $1,250 per tonne is being thought off.

However, when it comes to parboiled rice, traders said any export levy may not be imposed in a hurry.

On Tuesday, food secretary Sanjeev Chopra categorically denied that there was any move to curb exports of parboiled rice, which is the only variety of non-basmati rice whose exports are permitted.

S. Chandrasekaran, a leading trade policy analyst and author, remarked, "When the market is in a bullish trend, fly-by-night operators explore all possible ways to flout the laid-down rules. The idea of Minimum Export Price for each specialty rice variety will be effective if it is linked to random sampling, testing, and inspection of export cargo by the authorities and authorised private inspection agencies. The specialty and premium rice originates from specific regions. Therefore, port restrictions and allowing only consumer packing of 1 kg, 5 kg, and 10 kg in exports could add further value to the specialty rice. This will further prevent mislabelling and pilferages of common rice as specialty rice."

In total, India exported 17.8 million tonnes of non-basmati rice and 4.6 million tonnes of basmati rice in 2022-23, with around 7.8-8 million tonnes of the non-basmati rice exports being parboiled rice.

In July 2023, the government banned the exports of non-basmati white rice, accounting for nearly 25-30 per cent of the total rice exported from India, with immediate effect. Volume-wise, India exported 6.5 million tonnes of this variety of non-basmati white rice in FY23, up from 5.3 million tonnes in FY22 (an increase of nearly 22 per cent).

This ban was implemented in response to an 11.98 per cent year-on-year increase in rice inflation in June.

Last year, the government imposed a 20 per cent duty on all non-basmati rice exports to limit overseas shipments, but it appears to have failed, as international prices were very high. Official data revealed that despite the duty, the export of non-basmati white rice increased to 4.21 million tonnes during the September-March period of the 2022-23 financial year, up from 3.36 million tonnes during the same period in the previous fiscal year.