4 Basmati Rice Prices Rally as Minimum Export Price (MEP) Eases and Low Output Concerns Subside

1. Basmati Rice Prices Rally as Minimum Export Price (MEP) Eases and Low Basmati Rice Prices Rally as Minimum Export Price (MEP) Eases and Low Output Concerns Subside Output Concerns Subside The prices of basmati paddy have experienced an upturn from recent lows, attributed to the relaxation of the minimum export price (MEP). This adjustment is anticipated to facilitate the resumption of exports, addressing concerns about a lower-than-expected crop in the 2023-24 season, as indicated by trade and market sources. While the improved prices are a positive outcome for farmers, there are apprehensions due to reports of a decline in production. Farmers had previously borne the impact of falling prices attributed to a high MEP. In certain mandis, trading came to a halt as exporters ceased purchasing from farmers. According to Vijay Setia, former president of the Rice Exporters Association of India, the decision to reduce the MEP has proven to be advantageous for exporters, the government, and farmers. This adjustment has not only reignited exports, previously halted by the MEP, but has also restored basmati prices from Rs 30-32 per kg to its original range of Rs 38-40 per kg. The cut has ensured that only high-value basmati rice is exported by the government. Trade and market sources indicate that the prices of certain basmati varieties, which had dropped to Rs 3,300-3,400 per quintal after the imposition of the $1,200 per tonne MEP, have now rebounded to over Rs 4,000 per quintal. The widely cultivated PUSA-1121 variety is currently quoted at around Rs 4,600 per quintal.

2. India's basmati production is estimated at 8-9 million tonnes, with over half being exported annually. In FY23, India exported approximately 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 consisted of parboiled rice. Globally, rice prices have surged due to an anticipated decrease in production resulting from El Nino. Asian countries, in particular, have been severely affected. The government, signaling its intention to reduce the MEP, began accepting basmati consignments priced below the $1,200 per tonne MEP in late October. A communication from the Union commerce ministry to the Agriculture and Processed Food Products Export Development Authority stated a revision of the price limit for basmati rice export contracts from $1,200 per tonne to $950 per tonne. On August 27, the government decided to disallow exports of basmati rice below $1,200 per tonne to prevent potential "illegal" shipments of white non-basmati rice disguised as premium basmati rice. Although the notification was initially extended indefinitely on October 15, a subsequent statement indicated an active consideration for the review of the MEP. This development came amid reports of farmer discontent over the extension, leading to some exporters ceasing new basmati purchases from farmers and causing a decline in open-market prices by Rs 300-400 per quintal since the MEP extension. If you are a rice importer wishing to buy rice in bulk or a rice seller willing to export bulk rice, then Tradologie.com is the right platform for you. Tradologie.com is a SaaS platform that facilitates bulk agro-commodities trade across the globe including all varieties of rice. Through tradologie.com’s interface, buyers can avail the best qualities of agro-commodities such as rice, wheat, pulses, spices and many other commodities at negotiable rates. A seller on the platform does not need to reach out to buyers via orthodox methods such as middlemen, visiting trade shows and countries and purchase leads which yield no guaranteed results. Sellers on the platform get better access to new global buyers, increasing their overall business orders and profits, as there are no middlemen involved in the trade here The transaction oriented platform has 600,000+ verified buyers and about 70,000+ registered sellers of agro-commodities from over 150 countries. To register as a buyer, click here. To register as a seller, click here. To stay updated with the latest happenings in the agro-trade industry, follow Tradologie.com across all social media channels.