Thailand's agricultural surplus, swollen by the constant downpour in recent months, could find a market in India.
There is an open market for imports of goods such as sugar in India at the moment and everyone is welcome," India's Commerce Minister Anand Sharma said in a recent talk in Bangkok.
India, which usually restricts imports of various agricultural goods, has opened part of the sought-after segment this year amid an ongoing drought.
"As of now, India has adequate food stocks that can last until the autumn of 2010 and this too despite the adverse impact of drought," he said.
Much of India's economic growth depends on agriculture and nearly 160 of the country's 600 districts have been declared drought-hit.
The drought has been blamed on the lack of rainfall since the monsoon season started in June. With rainfall 29% below normal levels, the country is bracing itself for a possible skyrocketing in food prices.
One of the most affected industries has been sugarcane, which relies heavily on water from the monsoon.
The drought in various parts of India has affected crops including sugarcane and the government has reacted by allowing duty-free imports of raw sugar and up to 1 million tonnes of duty-free imports of refined sugar, said Mr Sharma.
"Now there is no restriction on the import of up to 1 million tonnes," he said. The initiative is aimed at meeting the festive season's high demand.
Diwali, India's festival of lights, on Oct 17 is set to lift demand for sweets.
The drought could affect the festival and it is not uncommon for local governments to fall when consumers feel the sting of higher prices, said Mr Sharma.
The drought is so serious in Uttar Pradesh, which produces most of India's sugarcane, that two-thirds of its districts were declared drought-hit in late July, with rainfall 40-60% below average, according to reports.
"The rain shortfalls are not encouraging at all. It is very hard to predict them for different regions and how each state government will react in coping with the problems," said Mr Sharma.
In a bid to curb damage, government measures have included curbing grain exports, stepping up sugar imports, redirecting scarce electricity towards irrigation and cracking down on hoarding.
But with food grain supply likely to dwindle, Asean members and other exporters could benefit from any crisis or shortfall. India had 50.4 million tonnes of food grain - 18.79 million tonnes of rice and 31.62 million tonnes of wheat - in its granaries at the end of July, according to official data.
Since India consumed 219 million tonnes of food grain in 2008-09, as stated by Food and Agriculture Minister Sharad Pawar in Parliament last month, the country may need about 221.3 million tonnes of rice and wheat this year, given a slight increase in population from about 1.1479 billion last year, the Press Trust of India reported.
If consumption this year remains at the level of 2008-09, when fairly good rainfall increased the supply of food grain, the government can still feed the entire country for at least 82 days.
While the Food Corporation of India has built a stock of 14.14 million tonnes of rice and 10.34 million tonnes of wheat, different state agencies have built reserves of 4.64 million tonnes of rice and 21.27 million tonnes of wheat, the data showed.
Current reserves have far exceeded the government's buffer norms, according to which the country needs to keep food grain stocks of at least 26.9 million tonnes until July 1 and 16.2 million tonnes by Oct 1.
The huge stocks are the result of an all-time-high procurement of food grain this year.
Earlier this week, India's meteorology department forecast that this season's monsoon may bring only 87% of the usual rains.
But the huge reserves are expected to provide some cushion against the impact of the poor monsoon. India produced 99.15 million tonnes of rice and 80.58 million tonnes of wheat last year, paving the way for record procurement by the government at 57.6 million tonnes of both the grains.
Source : bangkokpost.com