May 20 (Bloomberg) -- India, the world’s second-biggest producer of rice, may scrap a ban on overseas shipments after a record harvest increased stockpiles, a government official said.
The government will assess reserves, purchases from farmers and supplies in the country before ending the curbs next month, said the official, who didn’t want to be identified because the information isn’t public.
Global rice prices have slumped by half from a record in 2008 as supplies rose and the global recession punctured the commodities boom. Prime Minister Manmohan Singh’s government, returned to power in elections that ended May 16, imposed the ban after political parties protested against rising food costs.
“It’s the right time to allow exports as we have a surplus, otherwise food will become feed if it stays in warehouses,” said Vijay Setia, former president of the All India Rice Exporters’ Association.
Prices climbed to a record $25.07 per 100 pounds in April 2008 after growers including Vietnam and Egypt halted shipments to secure supplies. July-delivery futures were little changed at $11.945 on the Chicago Board of Trade in after-hours trading.
Food Corp. of India, the biggest buyer of grain, has bought a record 28.6 million tons of rice from farmers this marketing season after the government raised the floor price and opened 28,000 centers to collect food grain, said the official. The state-owned agency purchased 28.49 million tons last year.
Welfare Programs
Exports of non-basmati rice were banned to rein in prices after demand from government welfare programs doubled in five years. The government has since September eased the curbs to allow shipments of a premium-quality grain and supplies to African nations, Nepal and Bangladesh.
Shipments were 5.63 million tons in 10 months ended January 2008 and fell to 1.53 million tons in the 11-month period ended February this year, data from the Food Ministry shows.
Production may total 99.37 million tons in the year ending June, up from 96.69 million tons a year earlier, the agriculture ministry said May 12. Wheat production may be 77.63 million tons, compared with 78.6 million tons a year ago.
The government may also fully lift a ban on wheat exports by ending a limit to allow shipments of up to 2 million tons, the government official said. Shipments were halted three years ago to bolster domestic supplies.
Wheat purchases from farmers rose to 22.85 million tons as of yesterday since procurement began April 1, surpassing last year’s record of 22.69 million tons.
Source : www.bloomberg.com