India to lower floor price for rice exports

Reuters on September 26 quoted a close source as saying that India will lower the floor export price of a popular rice variety in South Asia in the next few days.

The floor price for basmati rice, a popular variety in South Asia, will be set at $850 a tonne, down from $1,200 previously, the sources said, in a move aimed at helping millers and traders sell the rice overseas. The group had previously complained that overseas basmati prices were falling sharply.

Last month, India imposed a floor price of $1,200 a tonne for the export of this rice, in an effort to curb smuggling of non-basmati rice – whose exports are banned – with documents identifying it as basmati.

"The decision to lower the floor price for rice exports will help farmers who are losing money due to falling exports. This move will help India maintain its leading position in the global basmati rice market," said Prem Garg, president of the All India Rice Exporters Association. He said India was facing the risk of oversupply of the rice.

Indian farmers grow rice in Calcutta. Photo: Reuters

India exports about 4 million tonnes of basmati rice each year to countries such as Iran, Iraq, Yemen, Saudi Arabia, the UAE and the US. “The floor price of $1,200 is too high. That’s why most millers and traders are not exporting,” said Vijay Setia, a major exporter in Haryana state, one of India’s major rice-growing regions.

India has been making a series of moves in the rice market lately. Last year, it banned the export of broken rice. In July, it shocked the global market by imposing a ban on the export of non-basmati white rice.

India is the world’s largest rice exporter, with a 40% market share. Over the past month, the country has banned or restricted exports of all rice in trade, sending Asian rice prices to a 15-year high in August.

Ha Thu (according to Reuters)

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