The Hindu Business Line : Exporters seek exemption for premium grades rice from ban

Home Page - Rice
Agri-Biz & Commodities - Exports & Imports
Government - Agricultural Policy
Exporters seek exemption for premium grades rice from ban

K.K. Mustafah

Sweet ‘n’ sour: Workers threshing and winnowing the paddy at a field near Thrissur, Kerala. The Centre on Tuesday announced a bonus payment of Rs 50 a quintal, which is expected to help in mopping up stocks for the public distribution system and other welfare measures of the Government. However, the ban on non-basmati rice exports could dampen the market in the country. –

Harish Damodaran

New Delhi, Oct. 10 The Union Government’s decision on Tuesday to ban export of all non-basmati rice with immediate effect has sent shockwaves among the rice traders.

While there is grudging acknowledgement about the need for the government to keep domestic prices under check — more so with the threat of elections looming large — the exporters are, however, upset with the blanket ban on all non-basmati shipments.

“We understand the Government’s concern over ensuring adequate procurement of grain to meet the requirements of the public distribution system (PDS) and various welfare schemes. But that does not mean banning export of all non-basmati rice, including premium varieties that are not dispensed through PDS outlets”, said a Delhi-based exporter.

Demand from overseas population

These niche varieties — which are technically non-basmati and yet command a market especially among the overseas Indian population — include ‘Ponni’, ‘Swarna Masoori’, ‘Matta’ (red rice), ‘Sharbati’, ‘Jeera Samba’, ‘Kala Jeera’ and ‘Rambhog’. “Many of these cater to specific segments. The Ponni and Swarna Masoori rice, for instance, follows the Tamilian software engineer wherever he goes, just as the Malayali in Dubai cannot do without Matta”, he added.

Exports of ‘Ponni’, ‘Swarna Masoori’ and ‘Matta’ are annually estimated at 1-1.5 lakh tonnes (lt). ‘Sharbati’ similarly sells about one lt as standalone premium rice, in addition to the 1.5-2 lt that is mislabelled or admixtured with basmati. ‘Ponni’ and ‘Masoori’ are currently being exported at $550-600 a tonne free on board (f.o.b), with ‘Sharbati’ fetching $650-700.

These rates are way above the $300-350 a tonne at which ‘Parmal’, ‘PR-106’, ‘IR-64’ and other long-grain superfine varieties (which are procured for the Central pool) are shipped out from the country. “If the Centre does not want PDS supplies to be affected, the best way is to fix a minimum export price of, say $500 per tonne. This will ensure that the common and grade A rice procured by the Food Corporation of India (FCI) does not go out and, at the same time, the Indian diaspora market for premium non-basmati varieties is protected”, the exporter pointed out.

There is also uncertainty over the impact of the ban on premium aromatic varieties such as ‘Pusa 1121’ and ‘CSR-30’ that are still to be officially notified as basmati. This is even as ‘1121’ — hugely popular is markets such as Iran — is quoting at $1,100-1,200 a tonne, which is more than the $950-1,000 for the notified Pusa Basmati-1. In 2006-07, about 2.5-3 lt of ‘1121’ was exported, with the quantity projected at 7.5 lt for the current year.

“The Centre should clarify at the earliest whether the export ban applies to 1121 and CSR-30”, the exporter said. During 2006-07, non-basmati exports totalled 37.05 lt, valued at Rs 4,257.88 crore. Out of the 37.05 lt, the premium grades would add up to over five lt.

Meanwhile, the FCI and State agencies have procured 21.91 lt of rice for the Central pool during the current 2007-08 marketing season (October-September) as on Wednesday. This is below the 28.14 lt bought in the corresponding period of 2006-07.

More Stories on : Rice | Exports & Imports | Agricultural Policy

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page