India Sets A New Floor Price For Basmati Rice And Restricts Trade Of Non-Basmati
India has imposed a $1,200 per ton minimum export price (MEP) on basmati rice shipments, in an effort to calm local prices ahead of its upcoming state elections.
This announcement came after the government also banned the exports of non-basmati white rice back in July and imposed a 20 per cent duty on the exports of parboiled rice.
To overcome the export restriction, however, some rice traders went to classify non-basmati white rice as basmati, the government said in a statement. The MEP would help authorities to ensure that non-basmati rice would not be exported as basmati rice.
India and Pakistan are the two countries known to exclusively grow premium, aromatic basmati rice. India in particular ships out around 4 million metric tons of basmati rice to countries such as Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates, and the United States.
Malaysia, along with the Philippines and Vietnam, are the biggest importers of rice from India and will have to find other avenues for the supply of rice or rely on different types of rice varieties.
If a new source is not found within the next few months, Malaysians could face a rise in prices for imported rice. Currently, Malaysia imports rice from various countries including India, Pakistan, Vietnam and Thailand.
While Malaysia does import rice significantly from India, there are still multiple sources that we can rely on to act as a safeguard against drastic changes.
Following the export ban, there have been reports of panic buying and empty rice shelves at Indian grocery stores in the US and Canada, which in turn drove up the prices.
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