In a significant development for the basmati rice industry, the price of Pusa Basmati 1509, a variety with a shorter cultivation duration, has plummeted following the announcement of a minimum export price (MEP) by the Government’s agri-export promotion body, APEDA. This regulatory move has sparked debates within the industry, with stakeholders expressing concerns over the MEP being set too high, potentially affecting the competitiveness of Indian basmati rice in global markets.
Basmati rice caters to distinct overseas
The rice industry voices its opinion, asserting that the announced MEP, currently at $1,200 per tonne, is excessive and needs reconsideration, favouring a more reasonable range of around $950–1,000 per tonne. According to the sources, a prominent basmati rice exporter points out that various basmati rice varieties cater to distinct overseas market demands, warranting nuanced pricing strategies. A shift in market dynamics is anticipated once the fresh crop’s arrivals gain momentum.
Ministry advises to Apeda: Revise the MEP
The industry’s concerns extend to the possibility of overseas buyers scaling back their purchases if prices surpass the consumers’ capacity to afford them. As per the Commerce Ministry’s directive, APEDA has integrated changes into the online application filing system to ensure every export contract falls below the stipulated MEP of $1,200 per tonne. However, recognizing the potential implications, the Commerce Ministry has advised APEDA to engage stakeholders and evaluate the need to revise the MEP within a month.
Different opinions on MEP
While the Commerce Ministry justifies the imposition of MEP based on concerns of misclassification and illegal export of non-basmati white rice, industry insiders hold differing opinions on the price’s adequacy. Some assert that the high MEP could adversely affect segments that directly compete with imports from other countries, urging for a more balanced approach that safeguards the interests of farmers and exporters.
In this ever-evolving landscape, balancing the interests of the various stakeholders, ensuring fair pricing, and fostering a competitive edge in global markets are pivotal endeavours. The industry remains at a crossroads, hoping for a harmonious resolution that steers the course of basmati trade towards prosperity.