The Hindu Business Line : Export floor price for rice raised again

New price order
MEP on basmati rice hiked to $1,100 from $900
On non-basmati rice hiked to $1,000 from $650
Non-basmati variety’s competition Thai rice is sold at just $750

G. Srinivasan

New Delhi, March 28 On the heels of fixing a higher minimum export price (MEP) on basmati and non-basmati rice on March 5, 2008, the Government on Thursday night hiked the MEP on basmati rice further to $1,100 per tonne (Rs 44,000) and to $1,000 per tonne (Rs 40,000) on non-basmati rice.

A notification issued by the Director General of Foreign Trade (DGFT) has stated that basmati rice, including dehusked (brown), semi milled, milled both in either parboiled or raw condition could be exported from the country only if the minimum free-on-board price is $1,100 (against $900 per tonne that was fixed on March 5). However, exports to the Russian Federation are permitted subject to pre-shipment quality certification issued by Sri Ram Institute for Industrial Research or any other agency as might be notified from time to time.

In the case of non-basmati rice, the MEP which was set at $650 per tonne on March 5, 2008 now stands revised upwards to $1,000 per tonne per tonne. The transhipment arrangements, already under way for export contract, would also stand cancelled in public interest. The country exported 5.67 lakh tonnes of basmati rice and 31.87 lakh tonnes of non-basmati rice during the first eight months of the current fiscal.

Prices, availability

When contacted, a senior official of the Commerce Ministry said that the high MEP within a month on both basmati and non-basmati rice was prompted to ensure availability of rice within the country and to hold its price line from piercing the roof. This was also done with a view to prevent low-priced non-basmati rice from getting exported to countries like Bangladesh, Sri Lanka and Africa.

While endorsing the Government’s decision on jacking up MEP, the All India Rice Exporters Association President, Mr Vijay Sethia, told Business Line that the Government has been taking “very quick decisions in the past three weeks to ensure domestic supply and to moderate rice prices.” He, however, felt that those basmati and non-basmati rice exporters who have contracted orders at $900 per tonne and $650 per tonne respectively after March 5 notification should not be stopped from executing export orders as it would cause serious loss to them.

Unaffordable rates

Expressing disappointment at the decision, the South India Rice Exporters Association’s Secretary, Mr P Vishnu Kumar, said that the non-basmati premium rice such as Ponni and Sona masuri being exported from the South would now look “as good as banned” at $1,000 per tonne. He said that these varieties of rice have been fetching at best $750 per tonne, the price now Thailand rice is getting in the global market.

“If we fix MEP higher than what is affordable by the markets abroad when competing Thai rice price is at $750 per tonne, how can we export premium non-basmati rice to Far- East, West Asia, the US and Europe for our expatriate population?” Mr Kumar said. He pleaded that the port restrictions slapped early this month need to be modified to allow South Indian premium varieties to be exported from Chennai, Kochi and Mumbai ports, which alone have container facilities.

‘Allow old orders’

A leading basmati rice exporting firm KRBL’s Chairman and Managing Director, Mr Anil Mittal, is of the view that the Government could have taken this step three months ago. He said that even during PL 480 days India never banned rice exports particularly basmati and other premium non-basmati rice varieties and some mechanism must be found to at least allow contracted orders to be shipped as this involves the “credibility” of the suppliers to their overseas clients.

More Stories on : Rice | Exports & Imports

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