Monday, 26 November 2018
Non-basmati shipments to get subsidy from Nov 26 to March 25
As a 13 per cent increase in minimum support price (MSP) for paddy slows down India’s rice exports in the current financial year, the Centre has announced incentive to boost the shipments of the cereal. The non-basmati rice exports will get a 5 per cent subsidy under the Merchandise Exports from India Scheme (MEIS) from November 26 till March 25, 2019, a Commerce Ministry note said. The Centre’s latest move to subsidise the non-basmati rice shipments for the first time since exports were opened up in 2011 assumes significance as the country is headed for a record harvest of rice, pegged at 99.24 million tonnes by the Agriculture Ministry in its first advance estimates.Also, the rice stocks in the Central pool as on November 1 stood at 16.25 mt, over 60 per cent higher than the buffer norms.
The harvest of paddy has already commenced in several States and the state agencies led by Food Corporation of India have already started the procurement of the cereal. “The 5 per cent incentive under MEIS will definitely enhance our competitiveness in the world market,” said BV Krishna Rao, President of the Rice Exporters Association, a trade body of non-basmati rice millers and exporters. The subsidy coupled with a weak currency would help us offset the impact of the MSP on exports and cover the shortfall in shipments, Rao said. The Centre had increased the MSP for paddy by ₹200 per quintal at ₹1,750 per quintal for common variety and ₹1,770 for Grade A.
Indian’s non-basmati rice exports have slowed down during the past couple of months and exporters said the hike in MSP had hit their competitiveness in the world market thereby impacting the exports. In the first half of the current financial year, the shipments were down at 3.72 mt (4.28 mt in corresponding last year) valued at $1.59 billion ($1.74 billion). The opening up of non-basmati exports in 2011 has helped India emerge the largest rice exporter for past several years. Major markets for the non-basmati rice are the African and Asian countries. India, which ships out over 12 mt of rice, now accounts for over a fourth of the annual global rice trade estimated at around 47 mt by the Food and Agricultural Organisation. India competes with Vietnam, Thailand and Pakistan in the world rice market.
India’s total rice production during 2017-18 stood at 112.91 mt and the government is targeting 113 mt this year. The FAO in its recent biannual Food Outlook has forecast that global rice production is set to increase by 1.3 per cent to a new high of 513 mt this year and India would be spearheading the growth in production.