Govt may raise export price of non-basmati rice

The government is likely to increase the minimum export price of non-basmati rice to $600-$650 a tonne from $500 a tonne to improve domestic supplies and discourage exports, according to Vijay Setia, president, All India Rice Exporters Association.

"In a couple of days, the government could raise the MEP for non-basmati rice from the current $500 a tonne (free on board) to even above $600 a tonne," Setia said.

He said the industry has recommended increasing the MEP of non-basmati rice to avoid a complete ban on exports.

The government also feels that the MEP provision would help stabilise domestic prices.

V K Kaul, assistant general manager (cereals), Agriculture Processed Food Products Export Development Authority, said the MEP provision by the government would also discourage smuggling of rice.

There have been reports that rice was being smuggled into Bangladesh from West Bengal and the Northeast.

The government had banned export of non-basmati rice priced under $500 a tonne (free on board) on October 9, to maintain the buffer and public distribution system stocks, but exports under transitional arrangements were allowed.

Early this month, a senior government official had said the government is planning to impose a complete ban on export of non-basmati rice to avoid a likely shortage.

"Rice exports had already touched 3 mln tn in October, prior to the government's decision to ban exports," Setia informed.

The government has increased rice allocation to states under the targeted public distribution scheme since mid-2006 to conserve its dwindling wheat stocks.

"The move started adversely impacting domestic rice stocks," Setia said.

As on February 1, the government's rice stocks stood at 7.30 million tonne, down 42 per cent year-on-year on higher allocation under state-run welfare schemes and lower procurement due to high open market prices.

In Delhi, prices of Pusa Sharbati variety of non-basmati rice have risen by over Rs 1,000 per 100 kg to Rs 3,200-3,300 in the last two to three months.

An official with a rice export firm, who did not wish to be identified, said prices have been rising primarily due to higher exports to neighbouring countries.

"Open market supplies are tight and demand from neighbouring countries such as Pakistan and Bangladesh is on the rise," he said.