Court maintains ban on rice exports

Court maintains ban on rice exports

New Delhi: The Delhi high court directed the Directorate General of Foreign Trade (DGFT) to scrutinize the background of 82 companies allocated rice export quotas. It was hearing a petition by a rice exporter challenging the government’s method of allocating quotas on Wednesday.

Petitions from rice traders will be heard at the next court date, 7 September, said Prem Garg, chairman of the non-basmati committee of the All India Rice Exporters’ Association. “Eighteen new petitioners were there today. All of their cases have been clubbed together," he said.

The court also said that the stay on non-basmati rice exports, imposed at the last hearing on 26 July, will continue.

Rice exporters have challenged the online application system and said some have got multiple quotas under different company names, which is against the spirit of the decision by the government to allow 1 million tonnes of rice exports from the open-market.

Representatives of the rice exporters’ association last week met DGFT director general Anup K. Pujari to discuss overseas sales.

The exporters suggested that the minimum export price (MEP) of $400 a tonne should be raised. A lower price may encourage exporters to ship out rice meant for the public distribution system (PDS), which could raise domestic prices.

“MEP should be fixed at a premium and reflect the economic cost of procurement," Vijay Setia, president of the All India Rice Exporters’ Association, said in a letter to Pujari after the meeting. “This will prevent accusations of diversion of PDS rice for exports and also accusations of cornering of quota."

If the stay on rice exports isn’t removed soon, the government’s attempts to reduce overflowing foodgrain stocks before the October harvest may come to nought.

Traders will also miss an opportunity to take advantage of the rally in international rice prices. A Reuters report said offers for Vietnam’s 5% broken rice rose to $550-$560 a tonne, free on board (FOB) on Wednesday, from last week’s $530. It was last at that level in September 2008.