Illegal export of rice causing a setback

Export of rice meant for public distribution system (PDS) by some unscrupulous traders is stated to be causing a setback to India's efforts to emerge as a significant exporter of non-basmati rice.

Apart from diversion of rice meant for PDS, the main problem, according to some rice exporters here, is the export of non-uniform and inferior quality rice being sold abroad at discounted prices.

"The quality complaints are affecting the demand for Indian rice at destination markets," they said.

For instance, the exporters stated, when the Food Corporation of India (FCI ) released its buffer stocks for export by traders in 1995-96, there were complaints from Philippines and Indonesian importers as the rice released was old and of poor quality.

Subsequently, these two countries were stated have stopped importing rice from India for all practical purposes.

India has been exporting rice mainly to Africa, Bangladesh, Middle East, Russia, Philippines, Indonesia and Sri Lanka. In 1995-96, following FCI releases, rice exports from the country touched 5.02 million tonnes. Again in 2002-03, rice exports reached a peak of 5.07 million tonnes.

Subsequently, in 2003-04 and 2004-05, export of rice declined to 2.21 million tonnes and 1.5 million tonnes respectively.

According to sources, about 30 per cent of the rice allocated by the central government for public distribution, particularly for the tsunami-affected areas, is being illegally exported at present. The rice varieties being exported are 1001, IR64 and PR106.

The central government is despatching white and parboiled rice from Punjab and Haryana every month in rakes to southern states for public distribution.

"Once the rakes arrive in south India, it is being diverted in trucks by PDS dealers to private traders or millers in Andhra Pradesh by changing bills. These traders, in turn, are delivering rice at Kakinada or Kandla port," sources told Business Standard.

Explaining the modus operandi, they said that rice is being despatched directly to the exporter's warehouse at the port in the name of miller's bill and certification stating that the quality rice has been processed in the mill.

This kind of diversion is occurring in Tamil Nadu, Karnataka and Andhra Pradesh, particularly in places like Chennai, Nellore, Ongole, Miryalguda, Eluru and Ichapuram.