The Hindu Business Line : Plea to lift grain export controls

Mumbai, Jan. 4 The country’s grain export trade is upset with the Government that despite favourable conditions both at home and abroad, rice and wheat exports have not been opened up fully. While basmati is allowed for export with a high level of minimum export price and export duty, non-basmati exports have remained banned since October last year.

Wheat exports too are under an embargo. Traders point out that the conditions that prompted ban/restrictions on grain export do not exist any more. They say availability is comfortable, prices are under control and government stocks are adequate to meet emergency needs, if any.

According to Dr V.K. Bhasin of Commodity Today, competitors such as Pakistan, Vietnam, Myanmar and Thailand have immensely benefited from India’s continued embargo on non-basmati rice export. India has been in the rice market for over two decades. A sudden ban has created huge trade disputes, resulting in loss of credibility as a reliable supplier, he said adding it is not only a disincentive to farmers here, but also has rendered several export houses and rice mills idle. Rice mills in southern India have been the worst sufferers. A rice mill owner told Business Line that the least the Government should do is to allow low quality rice for export to destinations in Africa as there was no market for such rice within the country.

Unviable business

Many mills and exporters are said to be saddled with huge unsold stocks, which continue to incur heavy carrying charges, making rice business unviable.

In case of basmati rice, India is losing out heavily because of price restriction and export tariff. The minimum export price is fixed at $1,200 a tonne and there is an export duty of Rs 8,000 a tonne. These make the famed Indian basmati rice rather expensive. Pakistan has been a great beneficiary of India’s unimaginative policy, experts pointed out. Wheat export ban also needs to be lifted, at least partially, traders have demanded. Currently, buffer stocks with the Government are fairly in excess of the requirement, and on April 1 when the new season starts, such stocks may be as much as 9 million tonnes, against the minimum norm of 4 mt. Also, the next wheat crop prospects are looking good with acreage steadily climbing to over 26 million hectares.

If the weather holds good and yields turn out to be normal, harvest of 75 mt may become a distinct possibility. The Government will, therefore, have to liquidate excess inventory, which in any case is incurring huge carrying costs, it is argued. Experts also point out that inflation has been falling steadily, and concerns on the food front have eased considerably. It is time for New Delhi to review its restrictive export policy for grains and come out with positive decision, trade representatives say in unison.

More Stories on : Exports & Imports | Foodgrains | Rice

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