Traders, Fearing Non-Basmati Sales Curb, Shun Rice Exports

Indian exporters are reluctant to sign rice export contracts because they fear the government might clamp restrictions on non-Basmati sales, industry officials and traders said on Thursday.

"Indian rice exporters are afraid of signing contracts because of rumours that the government may impose some kind of ban on non-Basmati exports," said Prem Garg, managing director of Sri Lal Mahal Overseas Ltd, a leading Delhi foodgrains exporter.

"The restrictions may be imposed because of fears that there may be a shortfall as in the case of wheat," Garg said. But he dismissed fears of any such shortfall.

India halted wheat exports in September 1996 after a dip in output and fall in procurement. It decided to import two million tonnes of wheat in fiscal 1996/97 (April-March) to augment supplies and stabilise domestic prices. Tarun Kumar of Space Group, another leading foodgrain exporter, said: "There could be a possibility that the government will consider putting a quantitative ceiling on exports of non-Basmati rice. But it will be a temporary ceiling, not a permanent one."

 

Industry officials said export demand for Indian rice was dull and no new contracts had been firmed up in the last two weeks.

Traders said Indian five percent broken non-Basmati rice was currently quoted at $290 per tonne FOB, 10 percent at $280, 15 percent at $245 and 25 percent at $230, the same as last week.

"No new movement, no new contracts. Most of the current shipments are going to the Commonwealth of Independent States (CIS)," Garg said. Rashmi Bhimjayani, a Bombay foodgrain exporter, said India had so far contracted to export around one million tonnes of rice from the winter crop. India annually harvests two rice crops, getting the bulk of the output from the winter crop. Bhimjayani said shipments are currently going to Nigeria, the Ivory Coast, east European countries and Sri Lanka.

"Some parboiled rice shipments are also going to South Africa," Kishore Tanna, a leading exporter, said.

Tanna said the winter harvest had been completed and the rice crop in the 1996/97 (October-September) season was expected to be 81 million tonnes, compared with 80 million a year ago.

The Agriculture Ministry had forecast the 1996/97 winter rice crop at 71.27 million tonnes.

Government wheat procurement in the 1995/96 growing season fell to 8.2 million tonnes from 12.3 million tonnes a year earlier due to a three-million-tonne shortfall in output.

The country exported 600,000 tonnes of wheat in 1995/96 and 1.07 million tonnes between April and September 1996 when the government halted exports.