Good News: Non-basmati exports on cards

The centre is likely to allow export of non-basmati rice from next month and may also remove the quantitative restriction on wheat shipments as it has sufficient stock to meet the requirements of the public distribution system. 

The government has procured record rice and wheat in the current season on the back of bumper production and higher minimum support price. So far in this season, the procurement of rice and wheat stands at record 287.5 lakh tonnes and 229.5 lakh tonnes, respectively.

The foodgrains availability situation will be reviewed in June and after that the ban on non-basmati rice could be lifted, a top government official said. Since the UPA government has returned to power and the Centre has procured record quantity of rice this year, it is a matter of time before the ban is lifted, the official added.

“The GoM had deferred (in March 2009) a decision to allow non-Basmati rice export and instead allowed 20 lakh tonnes of rice shipment through diplomatic channel,” the official said.

“It had also decided to take stock of the foodgrains situation in June before lifting the curb on rice export.”
The quantitative restriction of 20 lakh tonnes on wheat export may soon be waived by allowing free trade as there is a record procurement this year, the official said, adding that the decision has to be taken by the Cabinet after the formation of the government.

The food ministry, which was objecting the export of foodgrains, is of the view that there is no danger to food security if export of wheat and rice is allowed for now, according to sources.

The food ministry had in early March recommended the removal of complete ban on wheat exports, but the ministerial panel decided to put a cap of 20 lakh tonnes, initially. The agriculture ministry has estimated rice output at record 99.37 million tonnes and wheat at 77.63 mt for 2008-09 season. The industry is also favouring immediate lifting of ban on non-basmati rice.

Leading rice exporter Kohinoor Foods joint MD Gurnam Arora said ban on rice and wheat should be removed to boost exports, which he said is down by 30% so far. “There should be free trade policy on agricultural exports,” he said.

Vijay Setia, former President of All India Rice Exporters Association (AIREA), said the government should stop the shipment through diplomatic channel and allow the export of higher grade of non-basmati rice so that the price of common variety is protected in the domestic market. He also pointed out that the notification that allows 10 lakh tonnes of non-Basmati rice to 21 countries has wrongly stipulated that the consignments should have a minimum of 25% broken rice. 

Personal Analysis: This is very good news for Lakshmi Energy & Foods, who is the largest non-basmati producer in India. I expect a target price of 112 within a month, currently trading around 70 levels.

Source: www.economictimes.com

Link: http://economictimes.indiatimes.com/Markets/Commodities/Non-basmati-exports-on-cards/articleshow/4558162.cms

Anurag Dujari 

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