Trade Articles

Deviating from its earlier directions, the UPA government has allowed shipping of 25,000 tonnes rice from the 2 units of the Pondicherry and Andhra Pradesh. In the notification issued by the Director General of Foreign Trade (DGFT), it has been stated that the partial relaxation has been given out towards the export ban on non basmati rice. The Venkatachalapathi Modern Rice and Bharat Exporters of the Pondicherry and Andhra Pradesh respectively, 100% export oriented units, have been given permission for exporting 12,500 tonnes of rice each. The notification has been issued by the Empowered Group of Ministers, chaired by Mr. Pranab Mukherjee.

Adding on, the DGFT said that the above stated export units would be allowed to ship the non basmati rice consignment only after meeting the requirement of the minimum export price (MEP) of 1000 dollars per tonne. It means that 2 companies would have to enter into the deal of selling rice in the international market in not less than around Rs 50,000 tonne. It has already been stated out that the non basmati rice export would be cleared out to the aforesaid export units only during the kharif marketing season of 2008-09. Apart of it, the quantify exported would be under the close surveillance of the appropriate system.

Earlier in beginning of this year i.e, 2008, under the confrontation of the pricing spiral, the government was forced to take up several precautionary measures for improving and ensuring the sufficient availability of the food grains in the local market. It was not the first time when the ban imposition has been placed on the rice. In October, 2007 also the center had imposed ban on the export of non basmati rice. But within the period of 15 days, restrictions were eased out to some extent with the introduction of the MEP system. At that time government also faced protests from the exporters stand. However, center again intrude the blanket ban on the rice and then done a hiking on the MEP of the basmati in the month of April. Afterwards it became 1200 dollars. Furthermore, it has also slapped Rs. 8000 export tax on per tonne on the aromatic basmati.

From last many months, demand from the rice exporters are echoed in the center, which want to have quantitative restriction on non basmati rice export instead of the government's complete ban. They have been putting forth the figures of the production which have been showing the increasing trend. Going by the predictions made by the government in this regard, the production of rice is likely to touch the mark of 83.25 million tonnes during the kharif season of 2008-09. Last year the output was figured out as 9643 million tonnes during the seasons of kharif and rabi. But even after going through its export move, the government is in no mood to write off the export ban on non basmati rice. The president of the All India Rice Exporters' Association said "I think the two companies which have been allowed to export will find it very difficult to sell at $1,000 as prices are almost half of that. Nothing much should be viewed in it as the permission has been given to only two of the export-oriented units."