India is likely to cut the floor price for basmati rice exports. Government and industry sources said on October 24, 2023 that the government is considering lowering the floor price, or minimum export price (MEP) for basmati rice, to $950 per metric ton from $1,200 a metric ton.
The government imposed the $1,200 per ton MEP on basmati rice shipments in August 2023 to keep a lid on local prices ahead of key state elections. However, the MEP has had a negative impact on basmati rice exports. Farmers and exporters have complained that the high floor price is making it difficult to compete in international markets.
The government is now considering lowering the MEP to help boost basmati rice exports. The decision is expected to be announced soon.
If the government lowers the MEP, it will be a positive development for basmati rice exporters. It will also help to increase the supply of basmati rice in international markets and bring down prices.
However, it is important to note that lowering the MEP could also have some negative consequences. For example, it could lead to lower prices for basmati rice farmers in India. It could also lead to an increase in the export of non-basmati rice disguised as basmati rice.
Overall, the decision to lower the MEP is a complex one with both potential benefits and drawbacks. It is important to weigh all of the factors involved before making a decision.