India, the world’s second-biggest rice grower, may cut the minimum export price (MEP) of the basmati variety by $200 a tonne to boost shipments, according to a government official with direct knowledge of the matter.
A ministerial panel on February 7 will consider a proposal to reduce the minimum price from $900 a tonne, or may scrap the floor, the official said, asking not to be identified, citing government policy.
Basmati shipments may increase 14 per cent to 2.5 million tonnes in the year ending March 31, should the government abolish the minimum export price, Vijay Setia, president of the All India Rice Exporters’ Association, said in a phone interview on Tuesday. If the price stays unchanged, exports may drop to 1.9-2 million tonnes in the year ending March, he said. The panel may consider cutting the benchmark export price or dismantling it, food minister K V Thomas told reporters on Tuesday. Indian traders have contracted to ship 3.5 million tonnes of basmati rice as of yesterday since the financial year began on April 1, 2011, according to the rice association.
