Chaman Lal Setia Exports MD Finds $490 Price Cap On Non-Basmati White Rice Exports Fair

The minimum price of $490 per tonne for non-Basmati white rice exports fixed by the government is "fair" for the industry and farmers, according to Rajeev Setia, joint managing director of Chaman Lal Setia Exports Ltd.

The government on Saturday lifted the ban on exports of non-Basmati white rice followed by an announcement of a floor price of $490 per tonne. 

The non-Basmati white rice was also exempted from export duty, while the levy on parboiled rice was cut to 10% from 20%.

"This is a very fair price. It has been calculated on the MSP of rice and paddy. If you process and procure the rice, it almost comes to $480 to $485. So it’s in the interest of farmers," Setia told NDTV Profit.

According to him, the move would benefit the industry as a whole.

However, Setia said that the decision is unlikely to have much impact on the performance of Chaman Lal Setia Exports as the company is more focused on the business of Basmati rice.

The government had imposed a ban on exports of non-Basmati white rice in July last year to maintain domestic supply of rice and keep prices under control.

Setia added that the frequent policy changes won't be favourable for the business and the government should consult all stakeholders to find solutions.

"I feel that this back-and-forth policy of the government is not good. I take into account three factors. We are a country with a very large population and it is the duty of the government to provide food security as well as affordable prices for the masses. Secondly, export itself is very important and sudden bans indicate that we are a non-serious exporter. Apart from that, we have to give remunerative income to farmers as well. In fact, all stakeholders should sit together and find solutions, as solutions are there,” he said.

Talking about the projection for the year, Setia said that the company will cross Rs 1,500 crore in revenue in the financial year 2024–25.

"This year, the crop size is higher by 15–20%. The crop sizes are very attractive for paddy. In such a climate, the industry should earn more and we should be doing better volumes this year. We are expecting above Rs 1,500 crore revenue in FY25. Margins always grow when our purchases are more competitive," he said.

Setia predicted that his company will maintain double-digit margins in FY25, and aim to clock a revenue of Rs 2,000 crore in the next fiscal.

Shares of Chaman Lal Setia Exports traded 1.04% higher at Rs 306.20 apiece on the NSE, against 0.09% drop in benchmark Nifty 50 as of 3:20 p.m.