“Basmati exports till September have dropped by approximately 20 per cent to 2.2 million tonnes compared with the previous year,” said Mohinder Pal Jindal, president of the All India Rice Exporters Association
In 2013-14, India exported 10.5 million tonnes of rice, helping keep its top position in the global market for the staple grain. Out of this, more than 4 million tonnes were basmati, with Iran being the biggest market.
He added, “Iran has increased import duty from 10 per cent to 45 per cent, Pakistan is offering competitive prices in global market. We are getting very less orders and want government to support the sector.”
Exporters now want the government to rebuild an interest subvention scheme discontinued in March 2014 to help them, some of them demanding the government to increase it to 5 per cent from the earlier 3 per cent.
A massive portion of India’s basmati rice output is exported. Exporters store basmati rice for one-two years, a process calling ‘ageing’ to improve the aroma. Several of them are sitting on such stocks and in the absence of government support and because of high interest on loans. Pakistan is offering competitive prices in global market,” said Jindal. “We are getting very less orders and want government to support the sector.”
According to experts, the commerce ministry and the Agricultural & Processed Food Products Export Development Authority (Apeda) have recommended extension of the interest concession scheme. The finance ministry has to make a final decision.
Gurnam Arora, joint managing director of Kohinoor Foods said, “Export margins are very less with high cost of rice, interstate taxes, electricity cost and service taxes. In order to compensate and to offset other disadvantages, an incentive in the reinstatement and increase in interest subvention from 3 per cent to 5 per cent is requested,”
The average price realization of Indian basmati in global market has come down to $1,100 a tonne from $1,450 last year. This has led to a drop in basmati prices in the local wholesale markets, too.