APEDA Cracks Down on Export Irregularities

The Agricultural and Processed Food Products Export Development Authority (APEDA), which oversees the National Programme on Organic Production (NPOP), has taken strict actions to address irregularities in organic rice exports from India. These actions come after a report highlighted export issues, especially following the government's restrictions on white rice exports and the imposition of a 20% export duty on parboiled rice.

Fines and Suspensions in the Organic Certification System

APEDA has fined the Sikkim State Organic Certification Agency and Reliteaur Foods Private Limited each USD 12,000, and suspended their accreditation for one year. The suspensions are part of the authority's response to violations, particularly concerning shipments on the merchant vessel mv Della, which have been detained by Customs since August. The case will be heard in court on October 17.

Rising Export Volumes Despite Regulatory Actions

Despite the scrutiny, Reliteaur managed to export 71,131 tonnes of organic rice between April and July of this fiscal year. Total organic rice exports during this period hit 1,46,585 tonnes, a notable increase from last year’s 1,07,727 tonnes. The bulk of these shipments came from major ports like JNPT, Mundra, and Kandla, with unexpected destinations such as Vietnam, Angola, and Mozambique, which traditionally don’t import organic rice from India.

Price Drops Raise Red Flags

The irregularities in the organic rice market have contributed to a significant drop in prices. Organic rice, which commanded a price of USD 9,40 per kg in September 2023, saw its value decline to USD 5,29 per kg by June 2024. This price drop has raised concerns among traders, as organic rice typically fetches a premium in international markets.

Ongoing Issues and Repeat Offenders

Industry experts like S Chandrasekaran, a trade analyst, are voicing concerns about repeated violations. Chandrasekaran pointed out that the directors of Reliteaur are the same as those of Elite Green Private Limited, a company penalized last year for major violations in the organic certification process. He emphasized the need for more rigorous checks to prevent the recurrence of such issues in the future.

Regulatory Oversight and Future Actions

Reports indicate that some exporters bypassed the ban on white rice by falsely labeling shipments as organic. Others dodged the 20% export duty on parboiled rice. Following these reports, the Department of Revenue Intelligence detained over 400 containers, some of which were found to contain non-organic rice upon arrival at their destination.

In response to these violations, APEDA has ramped up its monitoring efforts. Between April and July of this fiscal year, the agency issued 1,325 transaction certificates (TCs), compared to 799 during the same period last year. These certificates are mandatory for organic exports, highlighting APEDA’s efforts to uphold the integrity of India’s organic exports.

Conclusion: Proceed with Caution in Organic Rice Trade

With the recent regulatory actions and ongoing legal scrutiny, traders should remain cautious in the organic rice sector. It may be wise to delay large transactions until after the October 17 hearing, which could provide further clarity. Buying opportunities may present themselves after the market stabilizes post-hearing.





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