With the government easing restrictions on rice exports twice in a span of two weeks, traders now look forward to a complete lifting of the ban clamped six months ago.
On September 3, the Directorate General of Foreign Trade allowed exports of a premium non-basmati rice variety. On August 19, the directorate had permitted export of paddy seeds.
In its latest order, the directorate allowed export of Pusa-1121, a premium, non-basmati rice variety, from October 15, coinciding with the start of the 2008-09 kharif marketing season. India, the world’s third largest exporter of rice, continues to allow exports of the premium basmati variety.
The industry views easing of curbs as a precursor to a total withdrawal of the ban on export of rice. Easing of most export restrictions over the last few months by top exporters Thailand and Vietnam, amid an improvement in global supplies, has also added credence to industry’s expectations.
India had banned exports of rice in March when global food prices were high, triggered by grain shortages, and domestic inflation had started soaring, fuelled by crude and cooking oil prices. The timing of the ban also coincided with sowing of the summer season rice when stocks are generally low. The government wanted to ensure adequate supplies to combat a rise in domestic grain prices.
However, over the last six months, the supply scenario has changed and inflation too has started easing.
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India’s headline inflation slipped for the second consecutive week to 12.34 per cent for the week ended August 23 from 12.40 per cent in the previous week. On September 1, the country’s rice stocks were 8.3 million tonnes (MT), up 20 per cent on year.
A favourable monsoon has also boosted the area under rice sowing.