Agri Business

Rice exporters seek to be part of paddy procurement process in Telangana

Vishwanath Kulkarni Bengaluru | Updated on January 18, 2021

The move will help reduce FCI’s burden on storage and handling costs, say exporters   -  REUTERS

Want govt to compensate for price difference

Rice exporters are keen to be part of the paddy procurement process at minimum support price (MSP) in the forthcoming rabi harvest season in Telangana.

Exporters said that this will happen provided the Government compensates them for the price differential on the lines of the price deficiency payment scheme or Bhavantar, as the international prices are currently at a 10-15 per cent discount to the paddy MSP of ₹1,868 per quintal.

“We have a made a proposal to the Food Ministry in this regard recently,” said BV Krishna Rao, President, The Rice Exporters Association, the trade body for non-basmati rice exporters. “We are just asking the Government to pay the difference between the international and domestic price. The price difference can be 5 per cent some times or it can be 20 per cent and depends on the currency movement,” Rao said.

The harvest of rabi paddy would begin in March in Telangana and the estimated crop size this rabi season is about six million tonnes, of which about three-fourth or 4.5 million tonnes is of the long grain type suitable for exports, Rao said.

If the government agrees to the exporters’ proposal, then it would help reduce burden on Food Corporation of India (FCI) storage and handling costs, while ensuring MSP for growers and access to the grain for the exporters.

As part of the proposal, the exporters will encourage millers in Telangana to procure paddy at MSP and convert the same and give the rice for exports. Rao said the State government should ensure that rice millers pay MSP to farmers. The Centre should monitor the smooth execution of the proposal and compensate the miller/exporter for the differential price between the MSP and international markets, he added.

In the ongoing kharif marketing season, the Government agencies have already procured 56.41 million tonnes (mt) of paddy up to January 16, an increase of 25 per cent over the same period last year. Rice stocks in the Central pool stood at 18.66 mt and unmilled paddy stocks stood at 40.42 mt at the beginning of January, significantly higher than the buffer and strategic reserves of 7.6 mt for the period.

Rising demand

The demand for Indian rice has been on the rise on supply issues from other origin and shipments of non-basmati rice have more than doubled exceeding 7 mt in the April-November period over last year. Major rice producing countries such as China, Vietnam, Bangladesh among others are buying the Indian cereal.

Published on January 18, 2021

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