* End of floor price would spur sales of low grade basmati
* Move will help India cut its ballooning stocks
By Ratnajyoti Dutta
NEW DELHI, July 6 India's annual basmati exports
may rise as much as 15 percent in 2012/13, touching a record 3
million tonnes, after New Delhi, grappling with unmanageable
rice stocks, scrapped a floor price for overseas sales, industry
officials said on Friday.
India, the world's second biggest rice producer and top
basmati seller, was offering the aromatic grain at above $700
per tonne, while no such floor existed for common variety.
New Delhi earlier this week scrapped the $700 base price for
overseas sales of basmati rice.
Traders said ending the export price of basmati rice would
help exporters sell even lower grades of basmati, which may
fetch prices below $700 a tonne. India's premium basmati rice is
quoted at $1,055-$1,065 per tonne FoB.
"Removal of the MEP (minimum export price) is logical when
there is no curb on non-basmati rice," D.K. Gupta, an advisor at
state-run export registration agency- Agricultural and Processed
Food Products Export Development Authority (APEDA), told
India produced a record 103 million tonnes of rice in
2011/12 crop year that ended in June, a jump of about 8 percent
from the previous year, including 5.0 million tonnes of basmati.
In the last fiscal year that ended in March India exported
2.6 million tonnes, said Gupta, adding the decision to end floor
price for exports would spur demand for the premium rice from
markets in Saudi Arabia and Iraq, Europe and the United States.
India lifted a four year export ban on common rice, which
competes with supplies from Thailand, in September as part of a
strategy to cut surplus stocks.
With its bumper harvest in recent years and choc-a-block
warehouses, India could emerge as the world's second largest
rice exporter behind Thailand in 2012, shipping around 7 million
India's rice stocks stood at 32.1 million tonnes on June 1
against the targeted 12.2 million tonnes.
"Basmati export will rise by 10 to 15 percent in 2012/13,"
said R.S. Seshadri, director of Tilda Riceland, a leading
New-Delhi-based basmati exporter.
Traders said the country has so far exported about 5
million tonnes of common rice since September, when the ban on
non-basmati rice was lifted.
Indian common rice varieties are quoted around $375-$420 per
tonne, making supplies from the south Asian country attractive
compared to those from Thailand.
The benchmark 100 percent B grade Thai white rice
RI-THWHB-P1 was steady at $600 per tonne for the fifth
straight week on Wednesday. [ID: nL3E8I41LE]
(Editing by Keiron Henderson)