On Sunday, the government announced its decision to prohibit exports of basmati rice priced below $1,200 per tonne. This measure aims to prevent potential instances of “illegal” transportation of white non-basmati rice masquerading as high-quality basmati rice.

The commerce ministry released a statement indicating that it has instructed the trade promotion entity APEDA not to approve contracts valued below $1,200 per tonne.

Contracts below $1,200 per tonne that are already in place have been temporarily suspended.

A committee headed by the chairman of APEDA will be established to assess and determine the upcoming course of action.

India had banned the export of non-basmati white rice on July 20 this year.

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The statement read, “The Government has received credible field reports regarding misclassification and illegal export of non-basmati white rice, export of which has been prohibited with effect from 20 July 2023. It has been reported that non-basmati white rice is being exported under the HS codes of parboiled rice and Basmati rice.”

It said, “Contracts for Basmati exports with the value of $1,200 per MT only and above should be registered for issue of Registration – cum – Allocation Certificate (RCAC).”

“Contracts with the value of below $1,200 per MT may be kept in abeyance and may be evaluated by a committee to be set up by the Chairman, APEDA, for understanding the variation in prices and use of this route for export of non-Basmati white rice,” it said.

The statement also highlighted that there has been significant disparity in the contract prices of exported Basmati rice, ranging from the lowest contract price of $359 per metric ton, in contrast to the average export price of $1214 per metric ton observed during the present month.

The Committee is expected to deliver its report within a span of one month. Subsequently, a suitable decision can be made regarding the proposed exports of Basmati at lower prices, as envisaged by the industry.

The statement suggested that APEDA should engage in discussions with the trade sector to raise awareness about the issue and collaborate with them to discourage any exploitation of this opportunity for the export of white non-basmati rice.