With the removal of MAP on white rice and customs duty on Sella rice, export of rice will increase rapidly.
19-Oct-2024 01:47 PM
New Delhi. There are indications that the government is taking some more steps to liberalize its policy to encourage the export of rice. It is understood that the Central Government has decided to withdraw the minimum export price (MAP) of $ 490 per tonne fixed for white (raw) rice of non-Basmati category and the export duty of 10 percent applicable on Sella rice and a notification to this effect is also likely to be issued soon. This decision has been taken by a high level inter-ministerial panel.
Trade analysts believe that if this decision is implemented, there can be a tremendous increase in rice exports from India because Indian exporters will get an opportunity to keep the export offer price of their rice at an attractive or competitive level and the interest of importing countries in its purchase will increase rapidly.
The government has a huge surplus stock of rice, so it may face difficulty in purchasing it in huge quantities for the central pool.
The government wants that millers and exporters should buy paddy from farmers in maximum quantity. This can be possible only when exporters get complete freedom to export rice. Probably this is the reason why the government has taken a decision in principle to withdraw MAP and customs duty.
There is not enough space for safe storage of rice in government warehouses whereas domestic production of paddy-rice is expected to increase during the current Kharif season.
The government has also reduced the target of rice purchase from 521.27 lakh tonnes last year to 485.11 lakh tonnes this time.
Food Corporation is facing a serious crisis of rice storage especially in Punjab. Rice purchase decreased by about 48 percent in the first 15 days of October.
It is worth mentioning that at the beginning of this week, representatives of the Indian Rice Exporters Federation met the Union Commerce Minister and requested to remove MAP and customs duty because Indian exporters were facing difficulty in facing the challenge and competition from other rival countries including Pakistan.
The free on board export offer price of 5% broken Indian white rice is $488-492 per tonne while the price of Pakistani rice of the same category is $481-485 per tonne.
Similarly, the price of 25% broken Indian white rice is $481-485 and the price of Pakistani rice is $440-444 per tonne. But the export price of rice in the two main competitors- Thailand and Vietnam is above $500 per tonne.
But despite the imposition of 10% customs duty, the price of Indian Sella rice is the most attractive right now. Its price is $490-494 per tonne and the export offer price of Pakistani Sella rice is $500-504 per tonne.