India cuts basmati export tax

[Naveed Yaseen]

NEW DELHI: India has cut the floor price for basmati rice for overseas shipments, the trade minister said, as the government cautiously lifts controls imposed last year to ensure domestic supplies.

A panel of ministers decided to cut the export tax to $1,100 per tonne from $1,200 per tonne, but did not impose an expected tax on crude palm oil imports, Kamal Nath told reporters late on Tuesday.

The cut in the floor price for basmati exports should cheer exporters, who have faced defaults from buyers in the Middle East and have lost market share to rival Pakistan.

But Vijay Setia, president of the All India Rice Exporters’ Association, said traders had been expecting a bigger cut in the floor price.

“We welcome this but the government should again review the situation and reduce the minimum export price to $1,000 per tonne,” he told Reuters.

Over the last two years, India had fixed a minimum export price for basmati rice, banned shipments of wheat and removed the import tax on crude vegetable oils. It has since reimposed import duty on crude soyoil.

Later moves came as the ruling coalition struggled to rein in inflation a year ahead of general elections.

Earlier on Tuesday, the farm minister, Sharad Pawar, said the government would also consider allowing wheat exports and imposing a tax on crude palm oil imports as domestic prices and supplies were adequate.

“Prices of soybean, groundnut and overall oilseeds have gone down substantially. We will have to protect farmers and we may impose duty on crude palm oil,” Pawar said.

Adequate stocks of grains with government agencies and expectations of bumper crops have encouraged India to allow limited exports of non-basmati rice, and more recently wheat, after requests through diplomatic channels.

http://www.thenews.com.pk/daily_detail.asp?id=158173