Basmati rice exporters demand government support to improve exports

International prices of basmati have been declining over the last two years

By Jitendra
Published: Friday 05 February 2016

India is the largest producer of basmati rice, producing more than 65 per cent of the world total (Photo credit: Thinkstock)

With prices of grains and cereals plummeting worldwide, basmati rice exporters have urged the Union commerce ministry to include packaged basmati rice in the Merchandise Export from India Scheme (MEIS).

MEIS allows exporters of certain goods access to “Free on Board (FOB)” value, which means the shipping charges are borne by the importer instead of the exporter. Only those manufactured goods which have high export intensity and employment potential are notified under this scheme.

The Agricultural and Processed Food Products Exports Development Authority (APEDA) had reportedly recommended to the commerce ministry to include packaged basmati rice under this scheme in a meeting on February 2.

“I can’t say anything at this time. But we think we should help the exporters which will subsequently help farmers who grew this rice,” says A K Gupta, director, Basmati Export Development Foundation, a body under APEDA.

India is the largest producer of basmati rice, producing more than 65 per cent of the world total. Other major producers are Pakistan and Bangladesh. Indigenous to the Indian subcontinent, the basmati is a special variety of rice which is slender in shape and fragrant.

But India’s basmati rice exports have been declining since December 2014. While the production of basmati rice has increased by 20 per cent, international prices have fallen by 30 per cent in the last two years. Three years ago, basmati rice was exported at the rate of around US $1,300 per tonne. The current international price is $900 per tonne.

Exports also fell when Iran, which is the largest importer of basmati rice, was not issued import permits following US sanctions. Gupta says that even if the sanctions are lifted, the price will go by only $50 per tonne and, hence, exporters will need support from the government.

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