The Hindu Business Line : Minimum export price for rice hiked

New Delhi, Dec. 29 With domestic prices of rice riding an upward spiral, the Centre has further tightened the screws on exports. The minimum export price (MEP) for all non-basmati shipments has been hiked from $425 (Rs 17,000) a tonne free-on-board (f.o.b.) to $500 (Rs 20,000) a tonne.

The Centre had earlier on outrightly banned all non-basmati rice exports with effect from October 9. However, following complaints from exporters, who represented that the ‘non-basmati’ category covered a whole gamut of premium varieties not procured for the public distribution system (PDS), the blanket ban was lifted.

Instead, from October 31 onwards, non-basmati shipments were allowed subject to an MEP of $425 a tonne. This, it was presumed, would confine exports to only premium non-basmati grades such as ‘Sharbati’, ‘Sona Masuri’, and ‘Red Matta’, which are all non-PDS-compatible grains.

But with domestic prices shooting up by Rs 150-200 per quintal since November, the Centre seemingly does not want to take any chances, more so after the recent Assembly election reverses in Gujarat and Himachal Pradesh. The MEP for non-basmati exports has accordingly been raised to $500 a tonne “with immediate effect”, according to a Directorate-General of Foreign Trade notification, dated December 27.

“The latest move will basically clamp down on all superfine Grade ‘A’ rice exports on which levy is imposed on millers. This includes the five per cent double-polished, sortexed long-grain grades from Punjab and Haryana,” sources pointed out. Currently, ‘Sharbati’ rice is being exported from the country at $850-900 a tonne f.o.b., while ruling at $575 and $675 levels for ‘Matta’ and ‘Sona Masuri’, respectively.

On the other hand, the sortexed and double-polished rice of Indian long-grain varieties like PR-106 were being exported at roughly $400 per tonne before the MEP of $425 a tonne was imposed. The export prices of the same varieties have since then been re-adjusted upwards to $425 plus.

“There are many exporters who dispatch both basmati as well as non-basmati and very often to the same buyer. It is always possible to get the buyer to accept a lower-than-normal billing for basmati and over-invoice the non-basmati consignment. By hiking the MEP to $500 a tonne, the scope for such deals is reduced,” the sources added.

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

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