Centre announces 5 per cent subsidy to boost rice exports

Non-basmati shipments to get subsidy from Nov 26 to March 25

As a 13 per cent increase in minimum support price (MSP) for paddy slows down India’s rice exports in the current financial year, the Centre has announced incentive to boost the shipments of the cereal. The non-basmati rice exports will get a 5 per cent subsidy under the Merchandise Exports from India Scheme (MEIS) from November 26 till March 25, 2019, a Commerce Ministry note said. The Centre’s latest move to subsidise the non-basmati rice shipments for the first time since exports were opened up in 2011 assumes significance as the country is headed for a record harvest of rice, pegged at 99.24 million tonnes by the Agriculture Ministry in its first advance estimates.Also, the rice stocks in the Central pool as on November 1 stood at 16.25 mt, over 60 per cent higher than the buffer norms.

The harvest of paddy has already commenced in several States and the state agencies led by Food Corporation of India have already started the procurement of the cereal. “The 5 per cent incentive under MEIS will definitely enhance our competitiveness in the world market,” said BV Krishna Rao, President of the Rice Exporters Association, a trade body of non-basmati rice millers and exporters. The subsidy coupled with a weak currency would help us offset the impact of the MSP on exports and cover the shortfall in shipments, Rao said. The Centre had increased the MSP for paddy by ₹200 per quintal at ₹1,750 per quintal for common variety and ₹1,770 for Grade A.

Slowing exports

Indian’s non-basmati rice exports have slowed down during the past couple of months and exporters said the hike in MSP had hit their competitiveness in the world market thereby impacting the exports. In the first half of the current financial year, the shipments were down at 3.72 mt (4.28 mt in corresponding last year) valued at $1.59 billion ($1.74 billion). The opening up of non-basmati exports in 2011 has helped India emerge the largest rice exporter for past several years. Major markets for the non-basmati rice are the African and Asian countries. India, which ships out over 12 mt of rice, now accounts for over a fourth of the annual global rice trade estimated at around 47 mt by the Food and Agricultural Organisation. India competes with Vietnam, Thailand and Pakistan in the world rice market.

India’s total rice production during 2017-18 stood at 112.91 mt and the government is targeting 113 mt this year. The FAO in its recent biannual Food Outlook has forecast that global rice production is set to increase by 1.3 per cent to a new high of 513 mt this year and India would be spearheading the growth in production.

Foodgrains

Riding on a near normal monsoon, output of most food crops is projected to hit record levels in 2017-18 to give an all-time high foodgrain harvest of 284.83 million tonnes, 3.5 per cent higher than that of the previous year, according to the 4th advance estimates released on Tuesday.
Rice production is expected to touch a peak of 112.91 mt, 3 per cent more than last year’s, while wheat will just fall shy of the 100-mt mark, the data released by the Agriculture Ministry showed.
Pulses production, on the other hand, is seen crossing 25 mt, despite a substantial fall expected in tur production. The record increase expected in urad and gram will compensate for the tur shortfall.
Despite an anticipated 17 per cent drop in soybean output to 10.98 mt, total oilseeds production is projected to be similar to that of the previous year, at 31.31 mt, thanks to an impressive recovery expected in groundnut output at 9.18 mt, nearly 23 per cent higher than the 7.46 mt in 2016-17.

The production of coarse cereals too is expected to climb to a new high of 46.99 mt, up 3.22 mt from 2016-17, despite bajra yields being projected to slide 5 per cent.
A record 20 per cent increase in sugarcane production in 2017-18 to 376.9 mt has already precipitated a severe crisis in the sugar sector, requiring the government to intervene so that the sugarcane farmers, whose dues from sugar mills have mounted, get some reprieve. Cotton output, too, is projected to go up by more than 2 million bales (of 170 kg each) to 34.89 million bales, according to the official data.
The estimated maize output will be 28.72 mt, which is nearly 3 mt more than the final production in 2016-17.

Eggs to go on the boil

There’s a hue and cry about the soaring price of pulses, the primary source of protein for Indian vegetarians. But nonvegetarians, or more precisely eggitarians, too, don’t have it easy. Prices of their key protein source have been hitting record levels in recent months, with retail egg prices in some pockets of the country topping a record Rs. 5 this July.

Domestic egg prices seem set to soar even higher in the coming months. Data on the wholesale prices of eggs from the National Egg Coordination Committee shows that in the major consuming centres, egg prices in the first seven months of 2016 have ruled 1317 per cent higher than last year’s levels.
In Chennai, egg prices averaged Rs. 401 for a 100 this year compared to Rs. 344 last year. In Hyderabad, prices averaged Rs.359 against Rs. 305. These two cities are located in the two largest eggproducing States in India. Trends in other cities have been equally inflationary. Delhi reported prices of Rs. 357, against Rs. 318 and Mumbai Rs. 399 against Rs. 346.

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Spices Board Issues New Testing Norms for Cumin Exports

The recent incident of beetle-infested jeera (cumin seed) exports from India has once again brought the quality issue of Indian spices exports to the fore.

In order to address the issue, the Spices Board, has issued a circular requiring exporters to undergo stricter testing and quality check before shipping the consignment.

Tighter sampling norms

According to the Spice Board circular issued on Wednesday, the export consignments would need to undergo several revised procedures in sampling with immediate effect. Henceforth, the sampling intimations shall be placed one day prior to the proposed sampling date. Also, the certificate shall be issued by the Spices Board based on the undertaking on the day of stuffing – the level where most quality lapses were seen happening.

Also, now the undertakings shall be submitted to the Board before 2 pm for processing and issuing the certificate. No stuffing would be permitted without the presence of Customs/Central Excise officer. The Board has introduced random sampling at the Mundra Port (Customs Area) by the Spices Board officials for confirmatory testing of the consignments.

The Board would also undertake surveillance/ inspection at the stuffing area/Mundra port/Rajkot/Unjha during the months of April/May, the circular stated. Spices Board took serious note of the adulteration in shipments and inferior quality of cumin from Gujarat.

Threat to exports

“Since such reported shipments will affect the image and reputation of the country ass well as pose a threat to Indian cumin exports, these revised procedures are introduced with immediate effect,” it said. Bhaskar Shah of Jabs International, one of the leading spice exporters, said, “There are reports that most of the weak quality and artificial cumin is exported to South American countries. Whereas our quote is $2,500 per tonne CIF, those who export inferior quality produce quote $1,900. 

The inspection system and its enforcement are not adequate. This is affecting the image of Indian spices exports.” However, with Syria being a troubled region, India’s cumin seed exports are likely to touch 1 lakh tonnes by July.