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Informist, Thursday, Jul 18, 2024

 

By J. Navya Sruthi

 

MUMBAI – The government is likely to cut the floor price for basmati rice exports and set a fixed duty on exports of parboiled rice, given the excess availability of the staple grain in domestic markets, industry officials said. Increased sowing of paddy so far in this year's kharif season has also built pressure in domestic markets, they said. 

 

The government will definitely reduce the minimum export price for basmati rice exports as there is ample stock available in India, Naveen Kumar, trade director, rice desk, Hectar India Trading Pvt Ltd, told Informist. "There is a possibility that it may fix a duty of $100 a tn on exports of parboiled rice," he said. 

 

The government may likely release the notification on export duty reduction before the Budget announcement on Tuesday, Devendra Vora, a wholesale broker told Informist. "The correct time to export rice would be in September, as the crop will hit the market around that time," Vora added.  

 

Currently, basmati rice exports attract a minimum export price of $950 per tn and a 20% duty on parboiled rice exports. The government prohibited the export of broken rice variety in September 2022 and non-basmati white rice in July 2023 to control the soaring prices in domestic markets.

 

A minimum export price of $750 per tn would be an ideal duty, Kumar said, while Gaurav Kochar, a rice trader, expects a 5-10% reduction in the duty. During Apr-May, India exported 965,093 tn of basmati rice, up 16.2% on year, according to data from the commerce ministry. However, parboiled rice exports were around 3% down at 1.3 mln tn during the same period. Exports of other rice varieties fell nearly 77% on year to 265,874 tn during Apr-May, the data showed. 

 

As of Jul 1, rice stocks with the Food Corp of India were up 0.3% on month and 29% on year at 32.6 mln tn, the highest for the period since 2005. Stocks of unmilled paddy with the FCI were at 237 mln tn.  

 

Traders also expect the government to increase the quantity of rice exports on a government-to-government basis. Currently, India exports wheat to a few countries to meet their food security needs based on requests from their governments. 

 

According to the third advance estimates, India's rice production has been pegged at 136.7 mln tn, higher than 135.8 mln tn a year ago. Also, the area under paddy as of Monday, was up 21% on year at 11.56 mln ha, the sowing data from the farm ministry showed.  End

 

Edited by Vidhi Verma

 

US$1 = 83.65 rupees

 

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