Govt eases restriction, allows export of premium grade rice

India, the world's biggest producer of rice after China, partly lifted a six-month old ban on exports of some premium quality grain as the country is set to harvest a bumper crop for a second year.

Overseas sales of Pusa-1121, grown in north Indian states, will be permitted starting October 15, the trade ministry said today on its website. Details of the shipments from the new harvest must be registered with the ministry, it said.

Rice prices have fallen 25 per cent from a record in April as Thailand and Vietnam, the top suppliers, lifted export forecasts this year after farmers increased plantings. India will consider easing the export ban after the monsoon crop is harvested, farm minister Sharad Pawar said in June.

“This may be the first step in relaxing the ban totally,’’ said Vijay Setia, president of the New Delhi-based All India Rice Exporters Association on Thursday. The country may export most of the 1.4 million tonnes output of Pusa-1121 variety forecast for this year, he said.

Rice, the staple food for half the world, reached a record as exporters including Egypt, Vietnam and India halted sales to guarantee domestic supplies. Egypt may resume rice exports this month, Trade Minister Rachid Mohamed Rachid said in July.

High prices spurred sowing of paddy in India by 5 per cent to 34.5 million hectares (85 million acres) as of August 28, the farm ministry said. Output may top last year’s record of 96.43 million tonnes, said Setia, echoing a prediction last week by Mangala Rai, director general of the Indian Council of Agricultural Research.

Favorable weather

“Production may be at least a 10 per cent higher because of the favorable weather,’’ Setia said from Karnal in north India.

Sold mostly to buyers in Europe and the Middle East, Pusa- 1121 fetches more than $2,000 a tonne, Setia said.

The government did not classify the variety as basmati, an aromatic grain grown in the foothills of the Himalayas, when it announced the ban on exports in April.

That meant the Pusa-1121 rice couldn’t be sold abroad as only basmati was excluded from the shipment restriction.

“Basmati status is a must to promote this high-yielding, less water-guzzling crop to boost production,’’ Setia said.

Exports of Pusa-1121 must fetch at least $1,200 a tonne, or Rs 48,000, the trade ministry said today. Shipments will be restricted through ports in Kandla, Kakinada, Kolkata, Mundra, Pipavav and Jawaharlal Nehru Port Trust in Mumbai.