Govt may review rules on basmati exports

Govt may review rules on basmati exports
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First Published: Tue, Nov 25 2008. 11 26 PM IST

Grainy issues: India banned the export of non-basmati rice in April to stave off shortages in the domestic market. Indranil Bhoumik / Mint
Grainy issues: India banned the export of non-basmati rice in April to stave off shortages in the domestic market. Indranil Bhoumik / Mint
Updated: Tue, Nov 25 2008. 11 26 PM IST
New Delhi: The Union government may review its export tax on basmati rice and allow overseas sales at a lower price as it is losing market share to neighbour Pakistan, a trade official said on Tuesday.
Grainy issues: India banned the export of non-basmati rice in April to stave off shortages in the domestic market. Indranil Bhoumik / Mint
India had in April imposed an export duty of $200 (Rs10,000) on a tonne of basmati rice and raised the minimum price for exports to $1,200 per tonne, reacting to rising prices and dwindling stocks.
Pakistan, which also produces aromatic basmati, has cashed in on the moves, the executive director of the All India Rice Exporters’ Association, Anil Adlakha, said.
“Realizing that Pakistan is selling at just half the price, we wrote to the government to remove export duty and lower the minimum export prices,” he said. “The government is ready to discuss the two issues.”
The country had in September allowed the export of Pusa-1121, a premium non-basmati rice, and later included the variety in the basmati branded category.
About 15 days ago, Pakistan’s Super brand of premium rice was priced at about $850 per tonne, against $1,650 per tonne for India’s Pusa-1121, Rajeev Setia, a leading exporter, said.
“We are going to lose out to Pakistan in a big way. Just wait for three to four months,” he said. The country exported 5.5 million tonnes (mt) of rice in the year to March, up from 3.8mt the year before.
India, which also banned export of non-basmati rice in April to stave off shortages in domestic markets, recently allowed two firms to ship 12,500 tonnes, but analysts said it should not be seen as a move to gradually relax the ban.
Adlakha said the export ban on basmati rice would not help the poor as few consumed these superior varieties.
“On the other hand, there would be some loss of foreign exchange for the country,” he said, adding comfortable rice stocks should allay fears of domestic shortages.
Analysts say Pakistan, the world’s fifth largest rice exporter, has become more price-competitive than India due to a bumper rice crop and depreciation of the Pakistani rupee against the dollar.
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First Published: Tue, Nov 25 2008. 11 26 PM IST