← External Forces: Trade, Geopolitics & Market Access (all topics)
MEP (minimum export price on farm exports)
What it is
A floor price below which exports of a commodity may not be shipped, imposed by DGFT to restrain outbound volume and protect domestic supply and prices. It is an administrative lever applied at short notice
On rice it was used heavily through 2023-24: $1,200/tonne on basmati from Aug 2023, cut to $950, then removed in Sep 2024; the $490 floor on non-basmati white rice was lifted in Oct 2024
Impact on industries
- While in force it priced Indian exporters out of the grades below the floor, handing share to Pakistan in exactly the segments the floor excluded
- The deeper problem is unpredictability - it can be imposed or lifted by notification within days, so export contracts carry policy risk that cannot be hedged
- Removal produced an immediate recovery in volumes and let exporters price competitively across the full grade range again
- Timing has tracked the electoral and food-inflation calendar rather than trade fundamentals, so the trade treats reimposition as a live possibility