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Tuesday, Jun 22, 2004

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Grain exports may fall below 10 lakh t

M.R. Subramani

Chennai , June 21

FOODGRAIN exports from the country could decline to below 10 lakh tonnes this fiscal, according to exporters and industry sources.

``No new contracts are being signed since the Government has not come out with an export policy. There is a spike in white rice prices, while wheat exports are on hold. In these circumstances, we see an opportunity only to export par-boiled rice,'' an official with a multi-national exporting firm said. He did not wish to be identified.

Currently, Thailand is unable to make commitments to ship par-boiled rice for July and August. Therefore, exporters see an opportunity to fill this void particularly in Africa.

``Our five per cent sortexed is competitively priced at $251-252 f.o.b a tonne. With a freight advantage, we can deliver to the African countries' needs,'' the official, who did not wish to be identified, said.

Currently, Thailand quotes $256-260 f.o.b a tonne. Exporters feel that par-boiled rice should be available during this period to export.

"We can export a little bit of good quality par-boiled rice though our production is not with focus on exports," industry sources said.

On the other hand, exporters see little scope to export white rice. "No farmer will be ready to sell their produce to us at the rate we may offer. All of them would only like to sell to the Food Corporation of India (FCI)," they said.

The prices for white rice had firmed up during March-April, but they have come down a shade now as China has cut its purchases. At that time, exporters were hoping to sell white rice at around $245 f.o.b a tonne for 25 per cent broken even without the Government's assistance.

Currently, Thailand quotes $224 for the same grade and Vietnam quotes $218.

With wheat prices hardening in the domestic market and easing in the global market, especially since Australia has been pushing its exports vigorously in West Asia, exporters do not see good prospects for it.

"Taking all these into consideration, we will be lucky if we can export 10 lakh tonnes," the official said.

Foodgrain exports declined sharply last fiscal to less than 40 lakh tonnes from over 60 lakh tonnes during 2002-03. In August last year, the Governments suspended wheat allocation from FCI due to fall in stocks. Early this year, rice allocation was also stopped.

The Government encouraged exports of foodgrain from the second half of 2000 to cut down its bulging stocks. But with rice and wheat production being affected due to drought last year, it slowed down exports and stopped allocation from FCI.

With the Union Food and Agriculture Minister, Mr Sharad Pawar, ruling out allocation from FCI, exporters are looking forward to the export policy to continue shipments. However, a decision on the policy has been delayed as the Food and Commerce Ministries have not been able to decide on who should foot the assistance for transportation of the grains.

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