INDIA BUSINESS WORLD - OCTOBER 21^st - NOVEMBER 15^th - 2007

CENTRE ANNOUNCES THRESHOLD OF $425 FOR RICE EXPORTS

In a major relief to growers and exporters, the government has decided to exempt from export ban all non-basmati rice varieties, which have a minimum export price of $425 per tonne.

Stocks of all varieties lying in port godowns up to October 10 have also been exempted from the export ban. Super variety rice having an export price of above $425 will be treated like basmati. The decision to give these concessions was taken at a meeting of agriculture minister Sharad Pawar, commerce and industry minister Kamal Nath and Haryana chief minister Bhupinder Singh Hooda here. "Mr Hooda explained to us the situation being faced by Haryana and Punjab farmers. We also spoke on phone to Andhra chief minister Y S R Reddy who has been receiving representations from rice growers," Mr Nath said . He said exports for which letters of credit were opened before October 9 will not come under the ban. The Centre had imposed a ban on exports of non-basmati rice on October 9 to build buffer stock in the country and improve domestic supplies.

Mr Nath said the step should provide relief to exporters and growers as all premium quality rice with a price tag of $425 will be exempted from the export ban.

"We welcome the decision of the government which will benefit the farmers to a larger extent and the industry as a whole," said All India Rice Exporter Association president Vijay Setia.

Both rice growers and exporters have been sending representations to chief ministers of rice growing states of Punjab, Haryana and Andhra Pradesh besides the central ministries of commerce and agriculture.

The exporters had also faced enforcement problems from the customs authorities following which the directorate general of foreign trade had to intervene.

It had directed the customs commissioners to allow exports of all rice varieties for which LCs were opened before the ban was announced.

Prior to the export ban, Sharbati was fetching rates of $650-700 FOB per tonne, whereas Pusa-1121 was fetching between $1,350 and $1,400 per tonnes and $1,500 for Pusa basmati. As per the All India Rice Exporter Association, they were expecting a crop of 2.5-2.75 crore bags weighing 50 kg each this season of Pusa 1121 and 3.5 crore bags of 60 kg each of Sharbati from the states of Punjab, Haryana and UP.

"Everybody has been carrying massive stocks of Sharbati and now we will start purchasing Pusa 1121. Earlier, we were not quoting the rate for the varieties that we will do now," said KRS Sobti of Devasingh Sham Singh in Amritsar.

India exported 3.7 million tonnes of non-Basmati rice worth Rs 4,258 crore in 2006-07 accounting for bulk of the rice exports.