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States seek more rice exports

States seek more rice exports
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First Published: Wed, Aug 17 2011. 05 19 PM IST
Updated: Wed, Aug 17 2011. 05 19 PM IST
New Delhi: Several states have asked the government to allow more rice exports, food minister K.V. Thomas said on Wednesday, as a first round of one million tonnes remains blocked by a court and stocks are still bulging.
Thomas, who took independent charge of the portfolio in July, said on Friday India could consider allowing an extra one million tonnes of rice exports at the next meeting of a panel of ministers, which can act without cabinet approval.
“We have received several proposals for allowing exports from states like Andhra Pradesh where production was more than expectations,” Thomas told reporters.
“We will consider the states’ request,” he added.
India, the world’s biggest rice producer after China, eased a 2008 ban in July with the first exports allowed since a clampdown then to bolster domestic supplies.
But a court ordered suspension of the exports after the All India Rice Exporters Association questioned the government’s policy of allocating the quotas for overseas sales to 82 private millers on a first come, first served basis.
The procedure was “bad in law and unreasonable,” Sumeer Sodhi, the lawyer representing the All India Rice Exporters Association, told Reuters.
T he court is likely to take up the case again on 7 September, said Sodhi.
India’s rice producers are calling for exports as supply outstrips demand and stocks -- used for the government’s subsidized food programmes -- are far higher than targeted.
In its latest forecast, the farm ministry has estimated 2010-11 rice output at 95.32 million tonnes, up from 89.09 million tonnes in the previous year and against consumption which averages around 90 million tonnes a year.
On 1 August rice stocks at government warehouses were at 25.27 million tonnes against a target of 9.8 million tonnes.
The All India Rice Exporters’ Association said any fresh tranche of exports would not be affected by the court order.
“The stay (order) is specifically for the current lot permitted by the government last month. The court case will have no impact on any fresh lot to be permitted,” said Vijay Setia, president of the All India Rice Exporters’ Association.
Drop in the Ocean
If India does agree another tranche of exports, they will be just a drop in the ocean but could be well timed.
Top suppliers Thailand and Vietnam together normally ship out around 17 million tonnes of the staple per year.
But the Thai government has doubled the amount it will pay domestic farmers from November, which could push export prices up as high as $870 per tonne, making them uncompetitive.
Vietnamese prices have also risen as a result and the combination could make Indian shipments attractive.
Traders said Indian exporters could ship out non-basmati rice at $550 per tonne, free on board.
Traders also believe India will be able to capitalize on the variety of its output.
“Unlike wheat or sugar, there are so many rice varieties and there is a good deal of global demand for several grades of Indian rice. Our bio-diversity will help sell many premium non-basmati varieties,” Setia said.
A Bangkok-based trader said industry players there expected India to take advantage of selling at lower prices than in Thailand and Vietnam.
“We realize that India will gradually export more rice in the coming months and even more rice from India is expected next year,” said Korbsook Iamsuri, president of the Thai Rice Exporters Association.
Thomas also said the introduction of the proposed Food Security Bill, a poll promise of the government to give more cheaper grains to the poor, had been deferred to the next winter session of Parliament.
“We will be able to introduce the bill in the next session of Parliament as the process of consultation with state governments and different ministries is still on,” he said.
The panel of ministers has already approved a draft of the Food Security Bill, which now has to be ratified by Parliament to become law. It would need about 61 million tonnes of grains a year, the bulk of which would be wheat and rice.
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First Published: Wed, Aug 17 2011. 05 19 PM IST
More Topics: Rice | Exports | India | Food | KV Thomas |