By Kartik Goyal and Thomas Kutty Abraham, Bloomberg

New Delhi: Russia has banned import of rice from India, the nation’s biggest supplier, after it found a banned pesticide in shipments from the South Asian nation.

“The Russian side has stated the detection of dimethoate” pesticide as reason for the ban, Junior Trade Minister Jairam Ramesh said in a written reply to a question in parliament.

A halt in purchases by Russia comes at a time when exports from India, the world’s second-biggest grower of the grain, are expected to fall this year as a stronger rupee makes shipments less competitive. India will contest the ban because Russia’s government had agreed to hold off the restriction until November.

“We don’t know the provocation for the early ban,” Vinod Kaul, assistant general manager at the state-owned Agricultural and Processed Food Products Export Development Authority said. “Sales to Russia are a fraction of our total exports. It’s a question of denying market access and we plan to contest it.”

India exported 24,955.54 tons worth Rs288 million to Russia in the year ended 31 March 2006. Exports to Russia have averaged about 50,000 tons in the past five years, 1.5% of the total 3.6 million tons shipped from the country.

Russia’s government on 27 February threatened a complete ban on rice from India starting May 1 if the South Asian nation fails to implement a system to certify what pesticides Indian growers are using. The country said in December it would stop importing the grain from other nations including Thailand, Vietnam, Sri Lanka and the US last year.

India’s rice exports may fall at least 20% from 3.6 million tons shipped last year, R.S. Seshadri, director of New Delhi-based producer Tilda Riceland Ltd. said 8 May.

The Indian rupee is the third-best performer in the world this year, having risen almost 8% Bloomberg data shows.