The prices of fine quality aromatic rice, commonly known as basmati rice, have significantly dropped to Rs 3,200 per quintal. This decline comes as a result of exporters in the Indian states of Punjab and Haryana ceasing their purchase of basmati rice from the market approximately one week ago. The reason behind this halt in purchasing is the Union government’s decision to uphold a minimum export price (MEP) of $1,200 per tonne. Punjab and Haryana are two prominent basmati rice exporting regions, contributing significantly to India’s basmati exports, which amounted to around Rs 33,000 crore in the previous financial year, while the total basmati rice exports from India reached Rs 48,000 crore.
Exporters have expressed concerns, as they have seen international orders divert to Pakistan due to the MEP. The Union government initially imposed the minimum export price of $1,200 per tonne on basmati exports on August 25, which raised alarms among exporters. Following repeated appeals, Union Minister Piyush Goyal hinted at a potential reduction in the minimum export price to $850 per tonne on September 25. However, last week, the Department of Food and Public Distribution, operating under the Ministry of Consumer Affairs and Food and Public Distribution, issued a new circular, extending the registration-cum-allocation certificate for basmati rice beyond October 15. This development led to exporters discontinuing their procurement of basmati from farmers, contributing to the decline in prices. Prices for Basmati 1,509 and 1,718 varieties have experienced a drop of Rs 500 per quintal within the past week. Ashok Sethi, director of the Punjab Rice Millers and Exports Association, revealed that the government previously assured exporters that the minimum export price would be reevaluated and could potentially be around $850.
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