Basmati rice export prices below Govt. MEP

The export price of basmati rice has fallen considerably below the government-fixed Minimum Export Price (MEP) of $950 per tonne. Currently, exporters are facing challenges as the export price ranges between $800 to $850 per tonne. This significant drop in export prices has led to a decrease in global buyers' interest. The government's fluctuating policies on MEP have created uncertainty in the export market. Last year, the MEP was increased to $1200 per tonne, causing panic among buyers, leading to stockpiling. Subsequently, the reduction to $950 per tonne further impacted market dynamics. Importing countries rushed to procure basmati rice from India amidst the uncertainty created by the government's policy changes. Additionally, buyers turned to Pakistan, another major basmati producer, exacerbating the competition for Indian exporters. The decline in export demand has also affected domestic prices, causing a reduction from Rs 75 per kg to Rs 65 per kg. This decline is primarily attributed to the lower export off-take, leading to an oversupply in the domestic market. Basmati production in Kharif 2025 is anticipated to be better due to expected normal monsoon conditions. Farmers are actively purchasing seeds, indicating a positive outlook for the upcoming harvest season. If the government maintains the fixed MEP of $950 per tonne without addressing exporters' concerns, it could adversely impact the basmati trade. Pakistan, as a key competitor, may maintain an edge in the global market. Price Pressure and Impact on Stakeholders: With a potential bumper crop and high carry-over stock, prices are expected to remain under pressure. Exporters and farmers would bear the brunt of price depreciation, affecting their profitability.

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