India Starts Importing Rice As Output Concern Grows Real

After successive years of bumper production, India has started importing rice amid a projected shortfall in output of up to 16 million tons due to drought and floods, according to traders and millers.

Though the government has maintained that it would not import rice, the purchase from overseas markets by private traders is going to intensify in the coming days as the customs duty of 70 per cent has been abolished, they added.

"About four lakh tons of rice has already been imported by traders and the figure is going to go up," said a leading exporter, who did not wish to be named.

Federation of All India Rice Millers Association General Secretary Sushil Kumar Choudhury said some traders in southern India have contracted to import rice in huge quantities from countries like Thailand.

Rice prices in the domestic market have already gone up by about 25 per cent in the last four months on supply concerns.

Earlier this week, commenting on the scrapping of customs duty on rice, Agriculture Secretary T Nanda Kumar had said the government would not import but it had created an opportunity for private traders to do so.

However, advising caution, leading basmati rice exporter Kohinoor Foods Joint Managing Director Gurnam Arora said, "Prices in the global market flare up when India decides to enter the import market. So the import should be done secretly otherwise exporters would take advantage of it."

Traders have, however, refrained from making any projection about rice import this season, saying it's too early to comment. Nevertheless, the abolition of the import duty suggests renewed government efforts to boost domestic supply.

The customs duty was scrapped after drought in about half of India delayed sowing and pulled down paddy areas by about six million tonnes while subsequent floods in Andhra Pradesh, Maharashtra and Karntaka damaged the standing crop.

India had produced 99.15 million tons of rice in 2008-09.

Though the government has piled up huge stocks, about 47 million tonnes of rice and wheat till August-end, it would still like to have considerable quantity in reserves to meet any emergency in the next year, said a trader, explaining the rationale behind the government encouraging import by removing duty. (PTI)