Export ban works, pushes up paddy procurement
Decline in paddy procurement has narrowed down to only 9% -- thanks to the ban on exports -- compared to 22% in the first week of October. Paddy procured by the Centre up to October 22 stood at 8.36 million tonne (mt) compared to a much higher 9....
By TNN |
NEW DELHI: Decline in paddy procurement has narrowed down to only 9% –– thanks to the ban on exports –– compared to 22% in the first week of October. Paddy procured by the Centre up to October 22 stood at 8.36 million tonne (mt) compared to a much higher 9.17 mt in same period last year.
The ban on export of non-basmati is likely to be relaxed now by introducing a minimum export price (MEP) of $450 (around Rs 18,000) per tonne of paddy as suggested by the commerce ministry, even though the food ministry had lobbied for a comfort level of $500 per tonne (Rs 20,000) in order to beef up available supplies for the food security buffer.
In comparision to the current paddy procurement levels, the pace was distressingly slower at the beginning of the current marketing season. By October 9, when the export ban was first announced, the FCI had managed to only buy 3.3 mt of paddy against arrivals of 4.6 mt.
Compared to this, purchases for the central pool stood at 4.2 mt against higher arrivals of 5.2 mt in the same period last year. That spelt a sharp 22% drop in buys.
That the food ministry is still not satisfied, with the pace of arrivals in mandis in Punjab & Haryana and with procurement, was clear with food secretary Nand Kumar touring the former on Wednesday. “The pace of arrivals in mandis is still slow, given that a hefty bonus was announced recently for rice of both Grade A and common varieties,” ministry sources acknowledged.
The government had earlier accepted the CACP’s recommendation of Rs 645/qtl and Rs 675 per qtl (a good Rs 65 above last year’s level) for the two varieties. The CACP had also recommended an MSP of Rs 1,120 for basmati.
The bonus itself was announced only recently upon assessments that rice procurement would run into problems on the back of poorer than normal production and that the government’s set target of 27 mt in purchases may not quite be achieved unless strong measures were taken to boost mandi arrivals. Domestic consumption is pegged at around 24 mt, and the target itself was set too close to this for comfort but on projections of stagnant production compared to last year.
Output estimates for rice in 2007 were pegged at 80.15 mt, almost unchanged from 80.11 mt a year ago (notwithstanding increased acreage under the multi-crore National Food Security Mission).
The MEP — which is aimed at allowing only exports of high-value rice even while keeping an additional 2 mt odd of rice within the domestic system and ensuring that domestic prices remained economical — is expected to be endorsed by the Union Cabinet here on Thursday.
The decision to replace the blanket ban with an MEP was taken at a meeting between food minister Sharad Pawar and commerce minister Kamal Nath on Tuesday night after several rounds of meetings with key stakeholders including farmers’ representatives, exporters, and traders.
Paddy purchases by the Centre were at their peak in 2004-05, at 24.6 mt. In both 2001-02 and 2003-04, the Centre procured around 22 mt for the central pool. The least purchases in last 10 years were made in 1998-99 at 12.5 mt, in 2002-03 at 16.4 mt and in 1999-2000 at 18.2 mt.
The ban on export of non-basmati is likely to be relaxed now by introducing a minimum export price (MEP) of $450 (around Rs 18,000) per tonne of paddy as suggested by the commerce ministry, even though the food ministry had lobbied for a comfort level of $500 per tonne (Rs 20,000) in order to beef up available supplies for the food security buffer.
In comparision to the current paddy procurement levels, the pace was distressingly slower at the beginning of the current marketing season. By October 9, when the export ban was first announced, the FCI had managed to only buy 3.3 mt of paddy against arrivals of 4.6 mt.
Compared to this, purchases for the central pool stood at 4.2 mt against higher arrivals of 5.2 mt in the same period last year. That spelt a sharp 22% drop in buys.
That the food ministry is still not satisfied, with the pace of arrivals in mandis in Punjab & Haryana and with procurement, was clear with food secretary Nand Kumar touring the former on Wednesday. “The pace of arrivals in mandis is still slow, given that a hefty bonus was announced recently for rice of both Grade A and common varieties,” ministry sources acknowledged.
The government had earlier accepted the CACP’s recommendation of Rs 645/qtl and Rs 675 per qtl (a good Rs 65 above last year’s level) for the two varieties. The CACP had also recommended an MSP of Rs 1,120 for basmati.
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The bonus itself was announced only recently upon assessments that rice procurement would run into problems on the back of poorer than normal production and that the government’s set target of 27 mt in purchases may not quite be achieved unless strong measures were taken to boost mandi arrivals. Domestic consumption is pegged at around 24 mt, and the target itself was set too close to this for comfort but on projections of stagnant production compared to last year.
Output estimates for rice in 2007 were pegged at 80.15 mt, almost unchanged from 80.11 mt a year ago (notwithstanding increased acreage under the multi-crore National Food Security Mission).
The MEP — which is aimed at allowing only exports of high-value rice even while keeping an additional 2 mt odd of rice within the domestic system and ensuring that domestic prices remained economical — is expected to be endorsed by the Union Cabinet here on Thursday.
The decision to replace the blanket ban with an MEP was taken at a meeting between food minister Sharad Pawar and commerce minister Kamal Nath on Tuesday night after several rounds of meetings with key stakeholders including farmers’ representatives, exporters, and traders.
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Paddy purchases by the Centre were at their peak in 2004-05, at 24.6 mt. In both 2001-02 and 2003-04, the Centre procured around 22 mt for the central pool. The least purchases in last 10 years were made in 1998-99 at 12.5 mt, in 2002-03 at 16.4 mt and in 1999-2000 at 18.2 mt.
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