India inked deals to export approximately 500,000 metric tons of freshly harvested basmati rice, capitalizing on strong demand from leading purchasers in Europe and the Middle East, according to traders’ reports on Wednesday.
Every year, India ships over 4 million tons of basmati, a premium long-grain variety renowned for its fragrance, to countries such as Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates, and the United States, among others.
Rice holds a significant market share in Europe as well.
In June, India implemented a ban on the export of non-basmati white rice to stabilize domestic prices. Subsequently, in August, the country established a floor price, also known as the minimum export price (MEP), setting it at $1,200 per ton for overseas sales of basmati.
Read More: India prohibits non-basmati white rice exports amidst supply concerns
Nevertheless, due to the impediment posed by the floor price on the export of the premium variety and the burden it placed on farmers dealing with substantial stocks of newly harvested rice, the government opted to reduce the floor price for basmati exports to $950 per ton last month.
Following the decision in August, trade ground to a halt, but according to traders, the reduction in the floor price has revitalized the basmati rice trade.
“There’s been a great deal of interest in India’s new basmati rice crop and so far we have signed export contracts for around 500,000 tonnes,” said Prem Garg, president of the Indian Rice Exporters Federation.
“Normally we start getting orders for the new crop in September and October but the MEP of $1,200 a metric ton made it difficult for us to sign any deals,” he said.
According to two exporters, including Garg, Indian traders have finalized basmati export agreements ranging from $1,000 to $1,500 per metric ton.
Vijay Setia, a prominent exporter from Haryana, a major basmati rice-producing state in the north, noted that Turkey, Iraq, and Saudi Arabia have emerged as the primary purchasers of the rice this year.
“Despite the MEP of $950 a metric ton, it looks like we’ll be able to export our usual annual volume of around 4 million metric tons,” Garg said.
