Easing Of MEP Improves Basmati Rice Prices

New Delhi, Nov 8 (KNN) After seeing low prices of Basmati paddy for a couple of weeks its rate has increased because of the easing of the minimum export price (MEP), and as per trade and market sources this should enable resuming export amid concern over a lower than expected crop in 2023-24.

The improvement in prices should benefit farmers though reports of a production drop are cause for concern for them. They had to bear the brunt of falling prices due to a high MEP. In some mandis, trading was stalled because exporters stopped buying from farmers, reported Business Standard.

“The decision to cut the MEP has been a win-win for exporters, the government, and farmers. While on the one hand it has restarted exports, which had come to a standstill due to the MEP, on the other hand, it has ensured that basmati prices, which were languishing at Rs 30-32 per kg, have come back to its original of Rs 38-40 per kg. For the government, the cut has ensured that only high-value basmati rice is exported,” Vijay Setia, former president of the Rice Exporters Association of India, told Business Standard.

Trade and market sources said the price of some varieties of basmati that had dropped to Rs 3,300-3,400 per quintal a few weeks after the MEP of USD 1,200 per tonne was imposed had now climbed back to over Rs 4,000 per quintal.

The price of the widely grown PUSA-1121 variety has been quoting at around Rs 4,600 a quintal for the past few days.

In India basmati production is estimated to be 8-9 million tonnes, of which more than half is exported annually. India in FY23 exported around 17.8 million tonnes of non-basmati rice and 4.6 million tonnes of basmati rice.

Of the non-basmati rice exports, 7.8-8 million tonnes was parboiled rice. Globally, rice prices have shot up due to an expected drop in production because of El Nino.

(KNN Bureau)