India is set to cut the floor price for basmati rice exports to $850 per metric ton, down from $1,200 per metric ton, in a bid to facilitate the shipment of this rice grade by millers and traders. The decision, as per sources, comes in response to the decline in basmati rice prices in the international market. By lowering the floor price, India aims to support the rice export industry and promote the trade of basmati rice.
Last month, India’s Directorate General of Foreign Trade (DGFT) had raised the minimum export price (MEP) for basmati rice to $1,200 per metric ton to safeguard the domestic prices of this grade. However, with the recent decrease in international prices, the government has decided to revise the floor price to enable the export of basmati rice at a more competitive rate.
Basmati rice is a popular long-grain rice variety known for its aromatic flavor and unique characteristics. India, one of the largest producers and exporters of basmati rice, has been facing challenges due to the decline in demand and lower prices in the global market. The COVID-19 pandemic has also impacted the rice trade, leading to disruptions and reduced orders.
The reduction in floor price is expected to provide relief to millers and traders who have been struggling to find buyers for their basmati rice stocks. Lowering the price would make Indian basmati rice more attractive to international buyers, potentially increasing export volumes.
Rice millers have been facing difficulties in selling their produce, especially as countries impose restrictions and tariffs on imports amidst the pandemic. The reduction in floor price will help alleviate some of these challenges and encourage greater trade in basmati rice. It is an effort by the Indian government to support the rice industry, which plays a significant role in the country’s agricultural economy.
However, the move to lower the floor price may also have some implications for farmers. Basmati rice growers might be impacted by the decrease in prices, affecting their profitability and income. The government will need to closely monitor the situation and take necessary measures to address any adverse effects on farmers.
In conclusion, India’s decision to lower the basmati floor price to $850 per metric ton is aimed at boosting the country’s rice exports. This move is expected to benefit millers and traders by facilitating the shipment of basmati rice. While it may present challenges for farmers, the government needs to ensure a balanced approach to support both the export industry and the livelihoods of farmers in the long run.
