Ban on rice exports lifted partially
New Delhi, March. 4 After almost close to two years of the ban on export of non-basmati rice in the wake of fears of domestic shortage of rice from early 2008, the Government has partially lifted the ban on export of non-basmati rice by permitting its exports to Sri Lanka and Nepal with a ceiling on diplomatic grounds to keep the friendly ties with neighbours.
A notification issued by the Directorate General of Foreign Trade (DGFT) late on Wednesday said the existing ban on export of non-basmati rice would not be applicable to export of 20,000 tonnes of rice (Ponni Samba) to Sri Lanka through Project Export Corporation (PEC) and another 25,000 tonnes through MMTC, taking the total to 45,000 tonnes of export of non-basmati rice form the country with immediate effect. The prescribed quantities permitted would be exported by PSUs during kharif marketing season 2009-10.
However, the DGFT laced its limited nod with some riders such as that the rice to be exported must be 25 per cent of brokens and exports would be made directly and only by the designated PSUs with no associate exporter. Besides, the PSUs would procure rice at a price as close to as possible to the derived Minimum Support Price (MSP) so as not to disturb the existing price line in the domestic market. It further said recipient country will be advised by the Ministry of External Affairs (MEA) to enter into contracts for the exports only with the designated PSUs and designation of a private contractor by the importing country to supply rice would not be entertained. It is further stated that the PSUs will procure rice through tender according to the guidelines by the Department of Commerce and the PSUs will buy rice from the markets all over the country under which the supplier(s) would provide the requisite certificate to the PSU(s) confirming that rice has been procured to this effect. The supplier(s) will also provide a certificate to the effect that the rice is bought from those rice mills who have already met their levy rice requirements as stipulated in their respective States.
A welcome move
The South India Rice Exporters Association Secretary, Mr P. Vishnukumar, welcomed the partial relaxation of non-basmati rice exports to Sri Lanka and Nepal through PSUs but said private traders would also be allowed to export some quantities of non-basmati premium rice such as Ponni and Sona Masuri at least in consumer packs to all the markets where overseas Indians live and who have been patronising this variety for long.
Meanwhile, the growers of ponni rice which is reaped only in Tamil Nadu said the proviso that the PSU could obtain a certificate from rice mills who have met their levy rice requirements do not hold to the State as it has no such levy obligations. They say that normally the State produces 1.5 to 2 lakh tonnes annually and sending 20,000 tonnes of such rice would only encourage superior and premium grade Ponni rice to be exported out of the State. Moreover, Ponni rice does not leave any percentage of brokens since the grain length of this variety is short, unlike basmati which has long length.
The immediate past President of the All India Rice Exporters Association, Mr Vijay Sethia, told Business Line that only rice price is ruling reasonable compared to other foodgrain commodities the world over and by sending non-basmati rice at a time when domestic prices of such rice is ruling Rs 36-38 a kg would give way to higher prices for consumers.
The sources further said since the PSUs would have to procure this quantity of non-basmati rice before end-September when the kharif marketing season is over, this would to that extent put pressure on prices of this variety of rice, fuelling food inflation to the dismay of consumers. As Sri Lanka does not have any export ban on rice, the premium ponni rice normally being exported to Singapore, Malaysia, Dubai, UK, Canada and the US and fetching premium price would now make Sri Lanka as a transit point for re-export to other destinations, depriving the Indian growers the premium price.
Source: Business Line
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