New Delhi, Sep 14 (IANS): In a significant step to boost export of basmati rice, a premier GI variety rice of India, the government has removed the floor price on export of basmati rice, a move that will ensure good returns to farmers.

According to the ministry communication, it has been decided to remove the current minimum export price (MEP) of $950 MT for issuing registration-cum-allocation certificates (RCAC) for export of Basmati rice.

The Agricultural and Processed Food Products Export Development Authority (APEDA) will closely monitor export contracts to prevent any non-realistic pricing of basmati rice and ensure transparency in export practices, according to the Ministry of Commerce and Industry.

The decision came in response to ongoing trade concerns and adequate domestic availability of rice.

A floor price of $1,200 per metric tonne (MT) was introduced in August last year as a temporary measure in response to rising domestic rice prices in the wake of tight domestic supply situation of rice and to curb any possible misclassification of non-basmati rice as basmati rice during exports, in view of the export prohibition on non-basmati white rice.

After discussions with the trade bodies and stakeholders, the government had then rationalised the floor price to $950 per MT in October 2023, amid concerns that higher prices were hurting outward shipments.

According to Satish Goel, president of the All-India Rice Exporters' Association, the decision to do away with the floor price will help India export basmati rice in large quantities, and that is going to ensure good returns to farmers.

As per industry experts, there is a big overseas market for basmati varieties that are priced around $700 a tonne.

The country’s total exports of basmati rice stood at $5.9 billion in 2023-24. During the 2022-23 fiscal, basmati rice exports stood at $4.8 billion in terms of price, while in volume terms it was at 45.6 lakh tonnes.