India is expected to cut the floor price it has set for basmati rice exports, government and industry sources said on Tuesday, after farmers and exporters complained it was damaging trade.
The government is likely to bring down the floor price, or minimum export price (MEP) for basmati rice, to $950 per metric tonne from $1,200 a metric tonne, said the sources, who did not wish to be named because the decision has not been made public.
India imposed a $1,200 per tonne MEP on basmati rice shipments in August to keep a lid on local prices ahead of key state elections.
The MEP was expected to be cut with the arrival of the new season harvests, but the government said on Oct. 14 said it would maintain it until further notice, angering farmers and exporters who said the new crop had led to a drop in domestic prices.