Starched Diplomacy: Lid on rice exports may be partially lifted
India may partly lift the ban on rice exports in the guise of commercial diplomacy.
By Nidhi Nath Srinivas & Rajeev Jayaswal, TNN |
NEW DELHI: India may partly lift the ban on rice exports in the guise of commercial diplomacy. The government will decide this week on a proposal to let private companies export 13 lakh tonnes of rice to a few strategically-important African nations.
The fresh deals come at a time when domestic consumers are being forced to buy wheat instead of rice in ration shops because the government says it wants to conserve stocks. Rice is now 20% more expensive in the open market as compared to last May.
The move questions the recent government decision to ban rice exports. The plan to curb rise in the price of the commodity may also turn ineffective as the move would take the country���s total rice export this year to over 40 lakh tonnes, almost the same as previous years.
According to a proposal before the empowered group of ministers on prices, slated to meet next week, the country may allow private players to sell 13 lakh tonnes to three countries in Africa. These include 5 lakh tonnes for Senegal, 3 lakh tonnes for Ghana and 5 lakh tonnes for Liberia.
In addition, there is a push from the ministry of external affairs to export 20,000 tonnes more to Sri Lanka and 1,000 tonnes to Seychelles at a discounted price.
The government has approved the sale of 6.26 lakh tonnes to Bangladesh, Madagascar, Cormoros, Mauritius, Sierra Leone, Nepal and Bhutan. So, the country could end up exporting 20 lakh tonnes to neighbouring nations and African least developed countries.
Interestingly, the proposal comes at a time when the Cabinet has decided to replace 10 lakh tonnes of rice with wheat in ration shops. Although Food Corporation of India���s rice stocks on April 1, 2008, were 138 lakh tonnes against 132 lakh tonnes a year ago, the government has decided to push more wheat instead of rice to maintain stocks and keep prices low.
Consumers are buying more rice from ration shops because open market prices are spiralling. Parmal rice, which was selling at Rs 15 per kg last year, is now available for not less than Rs 18 per kg.
For private rice exporters, the new proposal allowing sale to Africa comes as manna from heaven. Since the quantities are large and importing countries are desperately looking for rice, they would be able to profit from the small window of opportunity. There is also a chance of Indian rice getting diverted or resold to other African nations willing to pay a higher price.
The commerce ministry has partly opened the door for private sector to muscle into rice being exported for diplomatic reasons. Companies such LMJ International have been specifically allowed to export to Bangladesh.
The companies are also exporting rice on behalf of public sector trading companies such as MMTC, PEC and STC. The PSUs have asked exporters such as Shivnath Harnarain, Amira Foods, LMJ International and Emmsons to execute the export orders signed with neighbouring countries and exempted from the ban.
The fresh deals come at a time when domestic consumers are being forced to buy wheat instead of rice in ration shops because the government says it wants to conserve stocks. Rice is now 20% more expensive in the open market as compared to last May.
The move questions the recent government decision to ban rice exports. The plan to curb rise in the price of the commodity may also turn ineffective as the move would take the country���s total rice export this year to over 40 lakh tonnes, almost the same as previous years.
According to a proposal before the empowered group of ministers on prices, slated to meet next week, the country may allow private players to sell 13 lakh tonnes to three countries in Africa. These include 5 lakh tonnes for Senegal, 3 lakh tonnes for Ghana and 5 lakh tonnes for Liberia.
In addition, there is a push from the ministry of external affairs to export 20,000 tonnes more to Sri Lanka and 1,000 tonnes to Seychelles at a discounted price.
The government has approved the sale of 6.26 lakh tonnes to Bangladesh, Madagascar, Cormoros, Mauritius, Sierra Leone, Nepal and Bhutan. So, the country could end up exporting 20 lakh tonnes to neighbouring nations and African least developed countries.
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Interestingly, the proposal comes at a time when the Cabinet has decided to replace 10 lakh tonnes of rice with wheat in ration shops. Although Food Corporation of India���s rice stocks on April 1, 2008, were 138 lakh tonnes against 132 lakh tonnes a year ago, the government has decided to push more wheat instead of rice to maintain stocks and keep prices low.
Consumers are buying more rice from ration shops because open market prices are spiralling. Parmal rice, which was selling at Rs 15 per kg last year, is now available for not less than Rs 18 per kg.
For private rice exporters, the new proposal allowing sale to Africa comes as manna from heaven. Since the quantities are large and importing countries are desperately looking for rice, they would be able to profit from the small window of opportunity. There is also a chance of Indian rice getting diverted or resold to other African nations willing to pay a higher price.
The commerce ministry has partly opened the door for private sector to muscle into rice being exported for diplomatic reasons. Companies such LMJ International have been specifically allowed to export to Bangladesh.
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The companies are also exporting rice on behalf of public sector trading companies such as MMTC, PEC and STC. The PSUs have asked exporters such as Shivnath Harnarain, Amira Foods, LMJ International and Emmsons to execute the export orders signed with neighbouring countries and exempted from the ban.
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