In a move aimed at revitalizing its basmati rice export industry, India has announced a significant reduction in the floor price for this aromatic grain. The decision, driven by concerns from millers and traders about declining overseas sales, will see the floor price drop from $1,200 per metric ton to $850 per metric ton.
Last month, the Indian government imposed a minimum export price (MEP) of $1,200 per metric ton for basmati rice to prevent non-basmati rice from being exported under its label. However, this steep price hindered exports and prompted concerns within the industry.
The reduction in the MEP is expected to benefit not only millers and traders but also farmers who have been grappling with falling exports. With the new crop season set to begin soon, India faced the risk of a surplus in the basmati rice market, which could have led to a significant drop in prices, adversely affecting farmers and the rice sector as a whole.
India, along with Pakistan, is renowned for producing premium aromatic basmati rice. The lower MEP is expected to make Indian basmati rice more competitive in the global market. India exports approximately 4 million tons of basmati rice to various countries, including Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates, and the United States.
Industry leaders and exporters have welcomed the decision to lower the floor price, emphasizing that the previous MEP of $1,200 per ton had made it difficult for them to compete internationally. This move is seen as a strategic step to ensure India’s continued dominance in the global basmati rice market.