Price of rice

India, October 2023

The recent developments in the pricing of Indian rice, particularly Basmati rice, reflect a response to both domestic and international market dynamics. Here's a summary of the latest updates:
1. Floor Price Reduction for Basmati Rice Exports:
The Indian government is expected to reduce the floor price for Basmati rice exports from $1,200 per metric ton to $950 per metric ton. This move is anticipated due to complaints from farmers and exporters that the initial floor price was inhibiting trade. The minimum export price (MEP) was set to moderate local prices ahead of key state elections, but with the arrival of new season harvests, it was anticipated to be cut. However, a statement on October 14 mentioned maintaining it. This decision was later reconsidered due to the drop in domestic prices caused by the new crop and its negative impact on both farmers and exporters. Lowering the MEP would benefit farmers and exporters who had been adversely affected by the previous MEP.

2. Revival of Basmati Rice Shipments:
The reduction in the MEP aims to revive Basmati rice exports. This decision follows complaints from farmers and exporters about the detrimental impact of the earlier price on trade.

3. Lifting Restrictions on Non-Basmati White Rice Exports:
The Indian government recently lifted restrictions on the export of non-Basmati white rice to specific countries such as Nepal, Cameroon, Malaysia, Philippines, Seychelles, and Ivory Coast. This move comes after an unexpected ban on such exports that was intended to stabilize domestic prices, which had caused significant disruption for traders with shipments held at ports. The recent government order now allows traders to proceed with their exports.

4. Market Dynamics:
The export prices and restrictions decisions reflect the Indian government's efforts to balance stabilizing domestic prices, supporting local farmers and traders, and maintaining the international market for Indian rice, especially the premium Basmati variety.

These policy adjustments are designed to create a conducive environment for the trade of Indian rice internationally while ensuring domestic market stability.