The government has decided not to allow the export of basmati rice below US$1,200 per tonne in order to curb possible “illegal” shipments of non-basmati white rice disguised as premium basmati rice.
In a statement Sunday, the Commerce Department said it had ordered trade promotion agency APEDA not to register contracts below $1,200 a ton.
Existing contracts below US$1,200 per tonne have been put on hold.
A committee will be set up under the chairmanship of APEDA to assess further action.
To control retail rice prices, the central government has taken several steps to boost domestic supply.
It banned the export of broken rice in September last year, while imposing restrictions on non-Basmati white rice last month. Last week, a 20 percent export tariff was imposed on pre-cooked non-Basmati rice.
With these restrictions, India has now imposed restrictions on all varieties of non-basmati rice.
According to the Department of Commerce, the government has issued instructions to APEDA (Agricultural and Processed Food Products Export Development Authority) to implement additional safeguards to prevent potential illegal exports of non-Basmati white rice disguised as Basmati rice.
According to the instructions, “Contracts for Basmati exports valued as low as US$1,200 per MT (tonne) and above should be registered for the issuance of a Registration-cum-Allocation Certificate (RCAC).”
According to foreign trade policy, APEDA is obliged to register all contracts for basmati rice export and then issues RCAC for basmati rice export.
The ministry added that contracts worth less than $1,200 a tonne could be suspended.
Contracts below this maximum price would be evaluated by a committee set up by the APEDA Chairman to understand the price volatility and use of this route for exporting non-Basmati white rice.
“It was found that there were wide fluctuations in the contract price for exported Basmati, with the lowest contract price being US$359 per tonne, while the month-to-date average export price was $1,214 per tonne,” it said.
The committee should present its report within one month. After that, a reasonable decision can be made on the lower-priced Basmati exports planned by the industry.
APEDA should consult with traders to raise their awareness of the matter and work with them to stop any use of this window for non-Basmati white rice exports.
India’s total exports of basmati rice in 2022-2023 were priced at US$4.8 billion while volume was 45.6 lakh tons.
Non-Basmati exports totaled $6.36 billion in the last fiscal year. In terms of volume, it was 177.9 lakh tons.
India’s rice production is estimated to have increased to 135.54 million tons in crop year 2022/23 (July-June) from 129.47 million tons last year, according to data from the Ministry of Agriculture.
The ministry said the government has taken measures to limit rice exports from India to check domestic prices and ensure domestic food security.
The export of non-Basmati white rice was banned on July 20.
“Rice exports have been found to be high in the current year despite restrictions on certain varieties,” it said. Combined, total rice exports (excluding broken rice, the export of which is banned) were 7.33 MMT on Aug. 17 (million tons) compared to 6.37 MMT in the same period last year, an increase of 15.06 percent .
It also said exports of parboiled rice and basmati rice have skyrocketed; There were no export restrictions for either variety.
While export of parboiled rice increased by 21.18 percent (3.29 MMT in the current year compared to 2.72 MMT last year), export of basmati rice increased by 9.35 percent (1.86 MMT in the previous year). year-to-date compared to 1.70 MMT last year).
The export of non-Basmati white rice, which has been subject to a 20 percent export tariff since September 9, 2022 and will be banned from July 20, also saw a 4.36 percent increase (1.97 MMT vs to 1.89 MMT in the previous year). Year).
According to the Ministry of Agriculture and Farmer Welfare Third Extended Estimate, production during the 2022–23 rabi season was only 158.95 LMT (lakh metric ton) versus 184.71 LMT during the 2021–22 rabi season, which is a decrease of 13.84 percent.
It added that international rice prices have also risen steadily internationally since last year, due to strong demand from Asian buyers, production disruptions registered in 2022/23 in some major producing countries such as Thailand, and fears of potential negative effects from the outbreak of El Niño.
The FAO (Food and Agriculture Organization) rice price index reached 129.7 points in July 2023; The highest level since September 2011, up 19.7 percent year-on-year.
“As Indian rice prices are still cheaper than international prices, there has been strong demand for Indian rice, leading to record exports in 2021-22 and 2022-23,” it said.
“The government has received credible testimonials of misclassification and illegal export of non-Basmati white rice, the export of which was banned effective July 20, 2023,” it said.
It has been reported that non-basmati white rice is being exported under the HS codes for pre-cooked rice and basmati rice, the ministry said.
In technical jargon, each product is assigned an HSN code (Harmonized System of Nomenclature). It helps in the systematic classification of goods around the world.
(Except for the headline, this article was not edited by NDTV staff and is published via a syndicated feed.)