Ban on sale of export rice goes

NEW DELHI: Rice exporters have got another breather from the government. The food ministry today postponed its ban on domestic sale of subsidised FCI rice by exporters till September 30. Moreover, all exporters who buy FCI rice before September 30 will also be allowed to lift extra quantities for upgrading quality. From October 1 onwards, however, according to the new policy already announced by the government, they will have to export the entire quantity of rice bought from FCI. In case, they are unable to do so, exporters will have to refund FCI the differential between the subsidised and market price of rice. Exporters will, therefore, have to buy the extra rice needed to improve their consignment quality from the open market. “The exporters who make payment to FCI up to 30th September, 2002, would be governed by the old policy, i.e. they would continue to get the allowance for broken. The exporters would be charged the difference between the open market sale price and the export price for the quantity of brokens left unexported,� states an order issued by the food ministry to FCI here today. As a result of the September 30 deadline, there is expected to be a heavy spurt in the export contracts registered with the FCI this week. “No exporter will be foolish enough to let go of this last window of opportunity to pick up cheap rice from FCI rather than buy from the open market to increase the percentage of whole grains,� a leading trader here said. Exporters are particularly happy that FCI will start demanding a refund for the unexported rice only after October 1, so that their profitability can improve further meanwhile through sales in the domestic market. As no date has clearly been mentioned from when such refunds will be collected, officials may need to issue a clarification on the matter, they added. The food ministry’s decision is a result of intense lobbying by exporters and the commerce ministry. Exporters have been against the idea of buying rice from the open market to improve quality as it would reduce profits. Anxious to meet its export targets, the commerce ministry too is opposed to any policy which may reduce volumes in grain exports. However, the government has had no option but to ban exporters from offloading their unsold brokens in the local markets as it had led to a major scam, with large-scale diversion of subsidised rice being sold at a premium within the country.