India to cut floor price for basmati rice exports after drop in overseas sales

India will cut the floor price for basmati rice exports in the coming days, sources familiar with the matter said, after millers and traders complained about a sharp drop in overseas sales of the premium aromatic grain.

India will lower the basmati floor price to $850 a metric ton, down from $1,200 a ton, to help millers and traders ship out the rice grade, said the sources, who didn't wish to be identified as they are not authorised to talk to media.

Last month, India fixed the floor price, or the minimum export price (MEP), for basmati rice shipments at $1,200 a metric ton.

Authorities said the MEP was imposed to help New Delhi ensure that non-basmati rice was not exported as basmati rice.

While amending the export policy, DGFT maintained that the export will be allowed on the basis of permission granted by the government to other countries to meet their food security needs and based on the request of their government.

Last week, India allowed the export of non-basmati white rice to the tune of 75,000 tonnes to the UAE. Notably, the export of non-basmati white rice was prohibited from July 20 to check the domestic prices and ensure domestic food security.

The exports to UAE are permitted through National Cooperative Exports Limited, the Directorate General of Foreign Trade said in its notification on late Monday evening.

In July, India surprised buyers by imposing a ban on the export of widely consumed non-basmati white rice, following a ban on broken rice exports last year.

"The decision to lower the basmati MEP would help farmers who were losing money on account of falling exports," said Prem Garg, president of the Indian Rice Exporters Federation.