Indian exporters have voiced their displeasure with the government’s decision to maintain the current minimum export price (MEP) for basmati rice as they fear it will benefit Pakistan. India and Pakistan are the exclusive producers of basmati rice. India exports over 4 million metric tons of this premium long-grain variety to countries like Iran Iraq Yemen Saudi Arabia the United Arab Emirates and the United States.
India maintains $1,200 a ton MEP for basmati rice.Millers fear decision will hamper overseas sales.India and Pakistan are the only growers of basmati rice.
In August New Delhi had set a floor price (MEP) of $1200 per ton and it was anticipated that this price would be reduced. However the government recently declared that the floor price would remain in place until further notice leading to discontent among exporters.
Indian exporters
are concerned that this decision empowers Pakistan to gain a stronghold in the basmati rice market in the short term. This is particularly problematic for India the world’s largest rice exporter which has also restricted exports of non-basmati rice types to control domestic prices before crucial state elections.
With the arrival of the new harvest prices for basmati rice have started to decrease and farmers millers and exporters had hoped that the government would lower the MEP which they consider too high. The decision to retain the $1200 MEP has led to significant challenges with farmers struggling to sell their produce due to the reluctance of millers and traders to buy at these prices.
Paddy prices for basmati varieties have declined by more than 20% since the imposition of the MEP. It’s worth noting that basmati rice is not commonly consumed in India and the government does not purchase this variety to build state reserves.
Conclusion
The concerns of Indian exporters over the government’s decision to maintain the minimum export price (MEP) for basmati rice which they fear will benefit Pakistan. Basmati rice is a premium long-grain variety extensively exported by India to various countries. The decision to retain the high MEP has created challenges for both farmers and exporters with the latter expressing concerns about empowering Pakistan in the basmati rice market.
FAQs:
Q: What is the main concern raised by Indian exporters regarding the government’s decision?
A: Indian exporters are worried that maintaining the minimum export price (MEP) for basmati rice will provide Pakistan with an advantage in the market affecting their sales.
Q: Why is this decision particularly significant for India?
A: India is the world’s largest rice exporter and basmati rice is a crucial component of its exports. The decision impacts India’s export competitiveness and the livelihood of those involved in the basmati rice trade.
Q: What was the original MEP set by the Indian government for basmati rice?
A: In August the Indian government set the MEP at $1200 per ton.
Q: Why are farmers millers and indian exporters concerned about the high MEP?
A: The high MEP has led to challenges in selling basmati rice with a decrease in demand as millers and traders are reluctant to buy at these prices.
Q: What impact has the MEP decision had on basmati rice prices in India?
A: Paddy prices for basmati varieties have fallen by more than 20% since the MEP was imposed affecting the income of those involved in basmati rice cultivation and trade.
Q: Is basmati rice widely consumed within India?
A: No basmati rice is not commonly consumed in India and it is primarily intended for export rather than domestic consumption.
Q: Why has India restricted exports of non-basmati rice varieties?
A: India has limited exports of non basmati rice to maintain control over domestic rice prices especially in the lead up to significant state elections.
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