Agri Business

Rice exporters body demands review of export notification

Our Bureau New Delhi | Updated on July 20, 2011 Published on July 20, 2011

BL21_rice.eps

The All-India Rice Exporters' Association (AIREA) has flayed the Commerce Ministry's procedures for exports of 10 lakh tonnes (lt) of non-basmati rice, asking exporters to submit applications within the next two days.

CAP ON SHIPMENTS

The Directorate General of Foreign Trade (DGFT), on Tuesday, issued the notification permitting export of 10 lt of rice from privately held stocks, i.e. sourced from the open market. The 10 lt quantity is to be allocated among individual exporters on a first-come-first-serve basis, subject to a cap of 12,500 tonnes for each applicant.

The notification has said that the applications for allotment would be received from 10 hours on July 21 to 17 hours the following day.

“Given that the notification was uploaded on the DGFT Web site on July 19 night and the applications are to be submitted by July 22 evening, it hardly gives any time for exporters,” said Mr Vijay Sethia, President AIREA.

According to him, it takes a minimum 24 hours to even send rice samples to prospective buyers, leave alone contracting deals. “In this case, it looks as though the notification is meant only for those exporters who had prior intimation that it was coming and have already contracted with buyers,” Mr Sethia told Business Line.

The notification has set July 27 as the date for announcement of the successful allottees, who would be given three weeks to furnish irrevocable and confirmed letters of credit and performance bank guarantees for 10 per cent of the export value.

The last date for exports would be November 18.

“If the exports are to be undertaken only by November 18, what is the tearing hurry to invite applications by July 22? First-come-first-serve makes sense only if all exporters, and not just a favoured few, have a fair chance to put in their applications,” said Mr Sethia, drawing parallels with the now-infamous 2G spectrum scam.

Mr Sethia also criticised the minimum export price (MEP) of $400 a tonne fixed in the DGFT notification as “too low”.

It will lead to diversion of rice meant for the public distribution system for exports, besides pulling down world prices to the detriment of farmers in India as well as Thailand, Vietnam and Pakistan.

Published on July 20, 2011
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