Government lifts 'minimum export price' on basmati rice, increases duties on edible oils

NEW DELHI: The Union Government has removed the minimum export price (MEP) threshold for basmati rice exports, the Ministry of Commerce and Industry announced in a statement on Saturday.

The decision aims to boost farmers' incomes by allowing the export of basmati rice, a premier GI-tagged variety from India. The statement highlighted that this decision was taken in light of adequate domestic rice availability and ongoing trade concerns.

The Agricultural and Processed Food Products Export Development Authority (APEDA) will closely monitor export contracts to prevent unrealistic pricing of basmati rice and ensure transparency in export practices.

In August 2023, a floor price of USD 1,200 per metric tonne (MT) was set for basmati rice exports as a temporary measure.

This decision was in response to a tight domestic supply and rising rice prices in the domestic market. It was also aimed at preventing the misclassification of non-basmati rice as basmati during exports, given that the export of non-basmati white rice is prohibited to meet domestic demand.

However, following representations from trade bodies and stakeholders, the government reduced the floor price to USD 950 per MT in October 2023.

In other measures impacting farmers, Minister of Agriculture and Farmers Welfare, Shivraj Singh Chouhan, announced via a post on social media platform "X" that the government has decided to raise the basic duty on refined oil to 32.5 per cent.

This move is expected to increase demand for mustard, sunflower, and groundnut crops, thereby boosting farmers' incomes. "The Modi government is committed to the development of farmers. It has decided to increase the basic duty on refined oil to 32.5%.

This will boost demand for mustard, sunflower, and groundnut crops. Farmers will receive better prices for these crops, and with the growth of refineries in small and rural areas, employment opportunities will also rise," Chouhan said in the post.

The government has also raised the import duty on edible oils from 0 per cent to 20 per cent. Chouhan added that, with the inclusion of other components, the total effective duty will be 27.5 per cent.

"This decision will increase the production of soybean meal, which will be exported. Other sectors related to soy will also benefit," Chouhan said in his post. On Friday, the government also removed the MEP on onions.

This decision followed expectations of a robust kharif crop and a favourable monsoon, along with stable market conditions at both the mandi and retail levels.

On May 4, the government lifted the export prohibition on onions, allowing exports with an MEP of USD 550 per tonne, alongside an export duty of 40 per cent. These restrictions were removed on Friday, allowing onion exports to the benefit of farmers.