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The Indian government also rejected exporters' requests to reduce it to around $900 per tonne. Exporters say the decision is unfortunate. The decision to maintain the current minimum export price was taken by a committee of ministers, headed by Home Minister Amit Shah, and forwarded by the Ministry of Food to the Ministry of Commerce and the Agricultural and Processed Food Export Development Agency (APEDA) on October 14.
The food ministry said in the announcement that the current agreement on registration allocation certificate for Basmati rice may continue after October 15 until further orders are issued. The government's agricultural export promotion agency, APEDA, from August 28 implemented the direction of the Ministry of Commerce by implementing changes in the online filing system, after which no Basmati export contracts were registered below $1,200 per tonne. It is similar to fixing a minimum export price (MEP) but has the scope of adjustment at any given time without the need to go through normal procedures.
At an online meeting between Basmati rice stakeholders on September 25, it was expected that the export price of Basmati rice would be revised downwards to $850 per tonne. It was said that earlier traders had also pressed the Commerce Ministry to lower the minimum export price to support growers.
For traders, however, trade decisions are unfortunately controlled by the food ministry. For Basmati rice, half of the production is exported, the other half is consumed domestically. Since it is sold at a high price, there is no connection with food security and farmers in the Geographical Indications area grow it primarily for export. Requiring the minimum export price to be at the actual price of $950-1,000 a tonne, the India Rice Exporters Association, which last month said importers could reduce quantities if prices exceed prices consumers are willing to pay.
According to data from the Agricultural and Processed Food Export Development Agency (APEDA), the average price offered by basmati rice exporters was USD 1,048.82 per tonne in October, 2022; 1,016.29 in November, 2022; $998.16 per tonne in December 2022 and $1,045.21 per tonne in January 2023.