Centre likely to lower basmati MEP, tightens stock limits on tur and urad

The Centre may look to ease some of the curbs imposed on basmati rice exports in a bid to help farmers.

This comes even as it tightened the stock limits on tur and urad just in time of their harvest and showed an inclination to release more wheat in the open market to tame inflation.

On basmati rice, traders said the central government was actively considering lowering the minimum export price (MEP) from $1,200 per tonne to around $900-1,000.

A top official is believed to have held a high-level meeting with exporters and others to understand the ground situation. However, there has been no official confirmation of any such meeting.

Data shows that a month before the MEP on basmati exports was imposed at $1,200 per tonne, a bulk of the overseas shipments had taken place at prices above $1,000 per tonne and very few quantities went below that rate.

A back-of-the-envelope calculation shows that assuming a procurement price of ~3,300-3,800 per quintal for basmati rice, the export comes to around $1,168-$1,167 per tonne.

Sources said the Centre is looking to lower the MEP on basmati rice.

This would ensure that farmers get a better price for their produce, which has started hitting the market. A drop in exports is pulling down their realisations.

Meanwhile, on tur and urad, the government — in a notification — said the stock limits for wholesalers and big-chain retailers at the depot have been reduced from 200 tonne to 50 tonne each.

For millers, it has also been reduced from the last 3 months’ production, or 25 per cent of annual capacity, whichever is higher, to the last one-month production, or 10 per cent of annual capacity, whichever is higher.

It also extended the time period for existing stock limits on tur and urad by two months till December 31.

On January 2 this year, the government imposed a stock limit on tur and urad to prevent hoarding.

The area sown for pulses during the current kharif season has remained lower at 12.25 million hectares as of September 22 against 12.84 million hectares in the year-ago period, according to the agriculture ministry data. The country imports some pulses to meet the shortages.

In a related development, food secretary Sanjeev Chopra on Monday said that the government may sell more wheat on the open market to control prices, which have reached their highest in nearly eight months.