20% Export Duty To Be Imposed On Parboiled Rice, MEP On Basmati
The central government has announced an 20% export duty on parboiled rice and in a separate move, had brought in a Minimum Export Price (MEP) of $12000 on basmati rice. A month before, the government had imposed a ban on exporting non-basmati white rice.
The 20% export duty on parboiled rice will be applicable from October 16th and the MEP on basmati rice will remain in force till October 15th reported the Business Standard.
The doubtful situation cast by the fear of El Nino; the variations in rainfall which have constrained the production in several states have led to such a decision.
These measures have been taken for two main reasons, to keep the domestic prices under check, also to keep enough grain in the country.
The area of land under cultivation till 25 August, this kharif season is around 4.4 percent more than last year’s 38.4 million. Monsoon deficiency by 7 percent has been recorded till 25 August, in East and North-East India, the main rice producing region, which also recorded a shortfall of 18 percent.
The market price of basmati rice currently is around $1000-$1100 per tonne and of parboiled rice is around $460 per tonne.
As per FY23’s exports, 17.8 million tons was of non-basmati rice, (of which parboiled rice exports was 7.8-8 million tons) and 4.6 million tons was of basmati rice.
“There are a lot of predictions on how El Nino might impact Kharif crops; the government has erred on the side of caution, so, in case El Nino has an impact, the government would have already taken action,” an official who wanted to remain anonymous told, reported moneycontrol. In addition, it reported, that such government measures are to be on till the Kharif sowing season would be over and also that decisions depended on the results of the monsoon yields, so that the government can take stock of things.
The retail prices of rice had gone up to 10.3 percent on year and in the wholesale market, it went up to 11.12 percent as on 7 August.
To bring down the rice price, apart from the decision to ban exports and imposing duty, the government has also been selling rice under the Open Market Sale Scheme. This has aided in bringing the reserve price down so as to yield a better response in the auctions.
In the global markets, the rice prices have gone up in anticipation of the drop in the production levels due El Nino. This has hit bad upon Asian countries, in Thailand, India’s close competitor, the prices have gone up, and Myanmar, a leading exporter has restricted exports recently.
