Agri Business

Non-basmati exporters want sops under MEIS extended

Vishwanath Kulkarni Bengaluru | Updated on March 14, 2019

High costs coupled with a stronger rupee have hit shipments


Indian non-basmati rice exporters have begun to lose the white rice market in Africa, the largest buyer, to competitors such as Vietnam, Myanmar and Pakistan as a hike in the minimum support price for paddy and an appreciating rupee have impacted the competitiveness of the cereal.

Though the Centre had provided an incentive of 5 per cent under the Merchandise Exports from India Scheme (MEIS) since November 25, the recent strengthening of the rupee has offset the impact of the scheme, exporters said.

Moreover, the MEIS ends on March 25 and so far, there has been no clarity on its continuation. As a result, international buyers are holding on to their orders, awaiting the Indian government’s stance on the incentive. “No orders are being booked beyond March 25. As a result, there’s a kind of uncertainty,” said BV Krishna Rao, President of The Rice Exporters Association, in Kakinada.

Rice exporters have urged the Centre to extend the MEIS till March 2020, when the current export policy ends. “We also want the Government to enhance the quantum of the MEIS incentive to 10 per cent to deal with the challenges posed by the volatile currency also the lower prices of the competitors,” Rao said. The rupee was trading at 74 against the US dollar during November end when MEIS was introduced for rice. Now the rupee is trading at 69.35 against the dollar, Rao said.

While Myanmar is selling white rice brokens as low as $295 per tonne, Pakistan is pricing it at $320 and Vietnam at $330. However, the Indian exporters are unable to price it below $350 per tonne, due to higher sourcing cost on account of increase in MSP. “As a result, we are losing markets to these countries,” Rao said. In the par-boiled category, India competes with Thailand, another major producer of the variety. The white rice, including both 25 per cent brokens and 100 per cent brokens, account for a third of India’s non-basmati rice shipments, while the par-boiled variety accounts for the rest.

Shipments of non-basmati, the third largest product after basmati and buffalo meat in India’s agri-export basket, for the April-January period have witnessed a decline in both volumes and value. Exports for the period stood at 6.12 million tonnes as against 7.24 mt in the same period last year. In dollar value, the non-basmati rice exports are lower by 18 per cent at $2.44 billion, while in rupee terms the decline is around 12 per cent at ₹16,971 crore.

“Incentivising exports will help farmers get a good price,” said RK Reddy, President of Rice Mills Association in Andhra Pradesh, where the harvest of the rabi crop will commence over next few weeks. “The crop has been good compared to last year,” he said. As per the latest estimates, rice production is expected touch a new high of 115.60 mt during the current 2018-19 season. Rice stocks in the Central pool stood higher at 22.79 mt as on February 1.

Published on March 14, 2019

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