Rice Exporters Flay $400 Floor, Say It May Lead To Diversion From PDS.

The government's decision to allow exports of non-basmati rice at a minimum export price of $400 per tonne would lead to diversion of rice from the public distribution system (PDS), rice exporter have said.

“The MEP of $400 is unreasonable and is anti-farmer... Such a low MEP will lead to diversion of PDS rice for exports,” Vijay Setia, president, All India Rice Exporters Association told FE.

“Export of 10 lakh tonnes of non-basmati rice has been permitted on private account... This export will be subject to an MEP of $400 per tonnes,” the Directorate General of Foreign Trade (DGFT) said in a notification issued on Tuesday.

Setia said even the rice procured by the Food Corporation of India costs more than the MEP stipulated. Food minister KV Thomas washed his hands of the issue, stating that it is commerce ministry that decides the MEP.

The empowered group of ministers on food, chaired by finance minister Pranab Mukherjee, had on July 11 decided to lift the over three-year-old ban on non-basmati rice. The ban was imposed in April 2008 to check inflation.The application for exports can be for a maximum of 12,500 tonnes and it must be accompanied with irrevocable and confirmed letter of credit. The application would be received through email from July 21 and the last date for applying for exports is July 22, the notification states.

“List of successful allottees will be declared on July 27 by applying cut wherever the quantity of 10 lakh tonnes is exhausted on a first come-first served basis,” the DGFT notification said.

However, Setia said even the time given to exporters to comply with DGFT specification would not help any genuine party.

“Giving such a short time indicates that applications for quota allotment can be made only by those who had prior intimation and not the trade in general,” he said.

Source : financialexpress.com