In a series of decisions aimed at addressing both domestic and international market dynamics, the central government on Friday lifted the Minimum Export Price (MEP) on basmati rice and onions, while also imposing stricter stock limits on wheat. These moves come as state elections loom in key agricultural regions, where farmers have been vocal about market challenges.
MEP on Basmati Rice Removed
The MEP on basmati rice, which was initially set at $1,200 per tonne last year and later reduced to $950 per tonne, has now been completely lifted. This change follows a sharp decline in basmati prices in major producing regions like Haryana and Punjab, where farmers have been seeking relief from export restrictions to benefit from overseas demand. With basmati prices dropping by over ₹1,000 per quintal, this measure is expected to provide a boost to farmers ahead of crucial elections in Haryana, a major basmati-producing state.
Onion Export Restrictions Eased
Similarly, the MEP on onions, set at $550 per tonne, has been lifted. This move comes in response to price stabilization in domestic markets and farmers’ demands in Maharashtra, another state preparing for elections, where onions are a key crop. Global reports of onion shortages are expected to help farmers secure better prices in international markets.
Wheat Stock Limits Tightened
While easing export caps on rice and onions, the government has simultaneously tightened stock limits on wheat to manage domestic availability and prices. Traders can now hold only 2,000 metric tonnes of wheat, reduced from the previous limit of 3,000 metric tonnes. Wheat processors, such as biscuit and bread manufacturers, also face a stricter stock limit, now allowed to hold only 60% of their installed capacity for the remaining fiscal year, down from 70%.
This move is intended to moderate rising wheat prices, which have climbed to ₹2,700 per quintal due to strong demand in the run-up to the festival season. However, some industry stakeholders argue that the current wheat prices are justified, given the significant increase in the Minimum Support Price (MSP) and bonuses offered by states like Madhya Pradesh and Rajasthan.
As elections approach, the government’s decisions are seen as a balancing act between addressing farmers’ demands and managing inflation in the domestic market.