India has signed export contracts for about 500,000 tons of new season basmati rice to meet strong demand from major buyers in Europe and the Middle East, traders said on Wednesday.
India exports more than 4 million tons of basmati rice every year to countries such as Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates and the United States. Europe is also a major export market.
In order to stabilize domestic rice prices, India banned the export of non-basmati rice in June, and then set a minimum export price (MEP) of US$1,200 per ton for basmati rice exports in August. However, because this floor price hindered the export of basmati rice and put farmers under huge inventory pressure, the Indian government last month lowered the floor price of basmati rice to US$950 per ton.
Traders said rice trade came to a standstill after the August decision, but the reduction in floor prices has injected new vitality into the basmati rice trade.
Prem Garg, chairman of the Indian Rice Exporters Association, said that people are very interested in India's new season basmati rice and so far, we have signed export contracts of about 500,000 tons. He said that usually Indian exporters start receiving orders for new season crops in September and October, but the market protection price of US$1,200 per ton makes it difficult for us to sign any deals.
Two exporters said that the price of basmati rice export contracts signed by Indian traders is about US$1,000 to US$1,500 per ton. Turkey, Iraq and Saudi Arabia are the largest buyers of Indian basmati rice so far this year. Garg said that despite the export floor price of US$950 per ton, it looks like annual export volume can still reach 4 million tons as usual.
Source: AgroPages
