PDS Rice May Be Exported As Govt Mum on MEP.

NEW DELHI: The failure of the DGFT to specify the minimum export price (MEP) in its March 1 notification on overseas sales of select varieties of non-basmati rice could facilitate export of lesser quality rice meant for PDS and other welfare programmes.

"That is a serious lapse in the notification since there is always the possibility that traders will export low-quality rice in the name of these varieties as was done with basmati earlier," a government official acknowledged. Trade body All-India Rice Exproters Association (AIREA), however, played this down.

An empowered group of ministers had allowed exports of select high-value rice varieties not procured for the PDS and other welfare programmes in February. A total cap of 1.5 lakh tonnes was decided on three rice varieties-Sona Masuri, Ponni Samba and Rose Matta-with the MEP set at $850 a tonne. Of these, Masuri commands a price of $1000-1500/tonne in the international market, way higher than the price for 'fair and average quality' (FAQ) varieties bought by the government for its welfare schemes.

Curiously, on Tuesday, a DGFT notification was silent on MEP even though it specified the quantity cap and the ports through which the rice should be exported. It also mandated that exports should be in 10kg consumer packs. Worries over traders sneaking out average quality rice in the absence of the MEP persists notwithstanding a categoric provision in the notificiation which states: "Customs will draw necessary sample(s) and get them tested for quality analysis from AGMARK Laboratories. Copy of the test report be sent to concerned RA who would keep a watch for possible violation/misdeclaration and take necessary action under FT (D&R) Act. "

The March 1 notification allows exports of 25,000 tonne each of Ponni and Matta from the Tuticorin and Cochin ports, respectively, while allowing export of 1 lakh tonne of Sona Masuri, of which 50000 tonnes would be shipped out from the Chennai port and anothe 50,000 tonnes from the Vishakhapatnam port.

The decision to allow conditional exports of high-value non-basmati rice for the first time since 2008 was taken under intense pressure from traders to open up the southern high value varieties on the contention that this would not impact PDS varieties. But traders perceived this as a poltically motivated decision (elections in April in Kerala and Tamil Nadu besides trouble over Telengana in AP, which grows Sona Masuri) that would divide rice exporters on regional lines.

Southern exporters were miffed that they had been discriminated against when the government allowed export of rice with MEP favouring the exporters in the North.

Non-basmati rice exports were banned in 2008, amid high food prices worldwide and a global shortage of rice, which pushed up prices to well over $1000/tonne at the time. Soaring prices led several rice exporter nations to follow India and ban or at least restrict exports for a time.

Source : economictimes.indiatimes.com