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Basmati rice exporters rally as government scraps MEP

Capital Market/ 14:23 , Jul 05, 2012

Shares of six basmati rice exporters advanced by 8.36% to 15.66% at 14:08 IST on BSE after the government on Wednesday scrapped the minimum export price on basmati rice to boost exports.

Meanwhile, the BSE Sensex was up 74.86 points, or 0.43%, to 17,537.67

Kohinoor Foods (up 15.66%), Chaman Lal Setia Exports (up 12.81%), Lakshmi Overseas Industries (up 12.18%), REI Agro (up 12.11%), KRBL (up 8.96%) and LT Foods (up 8.36%) gained.

The government on Wednesday scrapped the minimum export price (MEP) on basmati rice to boost exports. Basmati rice can be exported without any MEP. This will improve the price competitiveness of Indian firms in overseas markets. As far as non-basmati rice is concerned, there is no MEP fixed on non-basmati rice.

Earlier this year, the government had reduced MEP on basmati rice to $700 a tonne from $900 a tonne to make it more competitive in the global market.

India is the largest producer of basmati rice. The country exports the premium aromatic rice variety to Saudi Arabia, Iran, Kuwait and Yemen. A data showed that India exported around 2.5 million tones in 2011-12, a growth of about 15% over the previous year's 2.18 million tonnes. The country has shipped 4.25 million tonnes of non-basmati rice since the export ban on the commodity was lifted in September 2011.

 



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