Selective rice exports allowed subject to floor price of $850/t

NEW DELHI: Ending a prolonged ban since 2008 on the export of non- Basmati rice, an empowered group of ministers (EGoM) on food decided on Wednesday to conditionally open exports of premium varieties, including Sona Masoori, Ponni and Matta.


The rice varieties to be exported, though, will be capped at only 1.5 lakh tonnes and subject to a minimum export price (MEP) of $850/tonne.


The decision was welcomed, albeit mutedly, by a domestic industry starved of export presence in a keenly competitive global market, especially in India's core markets such as West Asia.


"For almost two years now, farmers growing these premium varieties have been forced to sell their rice for a price much lower than it will command outside," All India Rice Exporters Association (AIREA) president Vijay Setia said.


Interestingly enough, several other premium non-basmati varieties were ignored completely by the EGoM, including Sharbati, although the premium rice from Kerala and Tamil Nadu, two states going to the polls mid this year, besides AP and Karnataka have been allowed for exports to a limited extent.


"Limiting exports to only these three varieties, the government has taken a primarily political decision rather than one based on economic rationale, given the huge stocks the Centre currently has and the bumper wheat harvest expected in the market in just 3-4 weeks from now," a Delhi based rice exporter held.


As on January rice stocks are pegged at around 175 lakh tonne, a good 57 LT over the buffer norm of 118 LT for January 1.


The buffer stocking norm for rice in April, including an estimated 138 lakh tonne of winter rice that comes into the market in March, is 122 lakh tonne.


In addition, the new agricultural marketing season in March will also bring with it an estimated 81.4 million tonne of wheat into the market.


The total grain output for the 2010-11 farm year was pegged at 232 million tonne, around 8 million tonne lower than the target but higher the final output of 21 8mt in 2009-10. "We should take a liberalised approach on trade of certain agriculture commodities. Farmers are concerned that prices are coming down," farm minister Pawar said releasing the second advance crop estimates.