Introduction
In a significant move, the Indian government has removed the minimum export price (MEP) of $950 a tonne on basmati rice, amidst declining paddy prices. The decision is expected to boost exports and provide better returns to farmers. Basmati rice is one of India’s major exports, and the government’s move is likely to make Indian basmati competitive in the global market.
Basmati Rice Export Prices Drop
The Indian government’s decision to remove the MEP comes as basmati paddy prices have seen a significant decline of over 25% in the recent past. The weighted average price of Basmati paddy has fallen to ₹2,565 a quintal compared to ₹3,475 a year ago. The decrease in prices has been attributed to a bumper harvest, increased production, and favorable weather conditions.
Basmati Rice Exports Likely to Increase
The removal of the MEP is expected to lead to an increase in basmati rice exports. According to data, basmati rice exports have already seen an uptick in the recent past, with exports rising to 9.65 lakh tonnes valued at $1.04 billion in the current fiscal year, compared to 8.31 lakh tonnes valued at $917 million in the year-ago period.
Farming Community to Benefit
The removal of the MEP is likely to benefit the farming community, as farmers are expected to receive better returns for their produce. “The government’s move to remove the MEP is welcome. But exporters should ensure higher realisation to ensure farmers get increased income,” said S Chandrasekaran, a New Delhi-based trade analyst.
India to Compete with Pakistan in Global Market
The removal of the MEP is likely to make Indian basmati rice competitive in the global market, particularly in terms of pricing. Indian basmati rice is currently quoted at $990 a tonne, which is slightly higher than the quoted price of Pakistani basmati rice at $965 a tonne. With the removal of the MEP, Indian basmati rice is expected to gain an edge over its Pakistani counterpart in the global market.
Other Key Decisions
In addition to the removal of the MEP on basmati rice, the government has also made some other key decisions, including revising the wheat stock limit for traders, wholesalers, retailers, and processors. The government has also extended the zero import duty on yellow peas until December 31 to tackle inflation and ensure stable prices of pulses during the festival season.
Conclusion
The removal of the MEP on basmati rice is expected to have a positive impact on the farming community, exports, and the global rice market. The government’s move is likely to make Indian basmati rice competitive in the global market and provide better returns to farmers.
Frequently Asked Questions
What is the minimum export price (MEP) of basmati rice?
The minimum export price (MEP) of basmati rice was initially set at $1,250 a tonne and was later lowered to $950 a tonne. The government has now removed the MEP.
Why did the government remove the MEP on basmati rice?
The government removed the MEP on basmati rice to make Indian basmati rice competitive in the global market and to provide better returns to farmers. The removal of the MEP comes as basmati paddy prices have seen a significant decline of over 25% in the recent past.
What are the benefits of removing the MEP on basmati rice?
The removal of the MEP on basmati rice is expected to increase basmati rice exports, provide better returns to farmers, and make Indian basmati rice competitive in the global market.
Will the removal of the MEP affect the global rice market?
The removal of the MEP on basmati rice is likely to affect the global rice market, as Indian basmati rice is expected to gain an edge over its Pakistani counterpart in terms of pricing. The removal of the MEP is likely to make Indian basmati rice more competitive in the global market.
What are the implications of the removal of the MEP on the Indian farming community?
The removal of the MEP on basmati rice is likely to have a positive impact on the Indian farming community, as farmers are expected to receive better returns for their produce. The removal of the MEP is likely to increase exports, which can provide employment opportunities for rural laborers.
