NEW DELHI: India will withdraw a foreign commission of 12.5% from the current floor price for the export of basmati rice, said a Food Ministry official. However, industrial experts said that the move would not help basmati export.
India had reduced the floor price of basmati rice from $1,100 to $900 a metric tonne in September, which included a foreign commission of 12.5%. Now the concession given for payment of foreign commissions effectively reduced the floor price to $788/tonne.
Exporters said, scrapping foreign commission is nothing to do with the exports since the international price for the basmati rice is still higher than $950 a metric tonne.
The decision to tighten floor price norms follows a shortfall in the local summer-sown crop after the lowest monsoon rainfall in 37 years, and amid smuggling of higher grades of common rice such as Sona Mansoorie.
The country's summer-sown rice crop will likely to fall by 18% from a year earlier to 69.45 million tons. The government has comfortable rice stock levels thanks to two previous bumper crops, but it wants to ensure adequate supplies in the long term.
Source : commodityonline.com