India`s rice export thrives amid restrictions

New Delhi, Feb 2 (PTI) India, the second-largest rice
producer, sold about 29 lakh tonnes in the global market in
January to September 2008 amid a restricted environment
created by the government to control domestic rice prices.

Even though the exported quantity was small, shipments of
rice, both basmati and non-basmati, continued to destinations
like Saudi Arabia, Bangladesh, the UAE, and Sweden, according
to the data compiled by the US Department of Agriculture
(USDA).

India exported about 29 lakh tonnes of rice during
January to September 2008, of which non-basmati accounted for
19 lakh tonnes and basmati 10 lakh tonnes.

The analysis of the export data showed that India made a
modest beginning in January 2008 by shipping 6.6 lakh tonnes
of rice, and that, however, fell steeply in the consecutive
months.

Industry experts attributed a falling trend in rice
export to government measures, which were announced frequently
during the time when the country's inflation skyrocketed to
double-digit level.

"Concerns about food price inflation prompted the Indian
government to impose various restrictions on rice exports,
both basmati and non-basmati, over the past fifteen months.
Export conditions for both basmati and non-basmati have
undergone several changes during this period," USDA said.

In order to control domestic rice prices and step up
supplies, India increased the minimum export price (MEP) of
non-basmati rice to 650 dollars a tonne from 500 dollars a
tonne in the last one year.

The increased MEP affected export badly. A further dent
in exports was seen when a ban was imposed in April 2008,
except for a few countries. Non-basmati rice was exported
largely to Bangladesh.

After the ban in April, non-basmati rice was shipped to a
few select countries under the food aid programmes.

Nevertheless, the export of basmati, known as king of
rice, remained buoyant even as there was a slight revision in
the MEP in 2008. Last year, the government increased the MEP
of basmati rice from 950 dollars a tonne to 1,200 dollars a
tonne. It had also imposed export tax of Rs 8,000 per tonne.

Saudi Arabia purchased the maximum quantity of basmati,
5.21 lakh tonnes, while the UAE and Cameroon bought two lakh
tonnes and 1.19 lakh tonnes, respectively.

The government measures continue in 2009. However, the
MEP of basmati was slashed by 100 dollars a tonne and export
tax was also abolished, though exporters fear these would not
improve shipments in the current year. PTI