Rice export price hiked to $500 a tonne

Move may result in loss of market to Thailand.

The government has hiked the minimum export price of rice (MEP) to $500 a tonne (Rs 20,000), an increase of $75 over the earlier MEP. The increase has been done with immediate effect, said a DGFT notification dated December 27.

The government had announced a ban on non-basmati rice exports in early October. However, following representations from various exporters, the government removed the ban and introduced MEP to prevent exports of the varieties that are procured for the public distribution system.

However, domestic prices continued to rise even after the MEP cap on exports. According to industry officials, prices of most varieties have jumped by 10-15 per cent since the MEP was imposed, forcing the government to further hike the MEP.

Exporters said the move would affect their exports, leading to loss of markets to countries such as Thailand and Pakistan.

"Since the minimum export price of $425 a tonne was imposed, the industry has exported a quantity of just 70,000-80,000 tonnes and this is too small to impact domestic prices," said Prem Garg, the vice-chairman of the All India Rice Exporters Association, and managing director of Shree Lal Mahal Group, a major exporter of basmati and non-basmati rice.