India to export 5 lakh tonnes rice to Bangladesh.

India has allowed the export of 300,000 tonnes of non-basmati rice and 200,000 tonnes of wheat to Bangladesh, a government statement said last week, as good rainfall and higher planting have boosted crop prospects.

India, which curbed grain exports in recent years to head off domestic price rises, made the announcement after two global suppliers cancelled deals to ship some 65,000 tonnes of Black Sea wheat to Bangladesh after Russia curbed grain exports.

Wheat prices surged to a two-year high after drought-stricken Russia barred shipments, but Chicago wheat futures declined on Friday (Aug 6) amid end-of-week profit-taking.

The Indian grain will be shipped under a diplomatic deal by state-run Food Corporation of India (FCI) at its "economic cost," which includes the price paid to farmers and the cost of storage and transportation, the government said.

A Mumbai-based trader working with an international trading firm said the economic cost works out to about $340 a tonne, about the same as the current commercial rates in the neighbouring country.

Last week, Swiss firm Nibulon made the lowest offer at $319 a tonne, including cost and freight, in a Bangladesh tender to import 50,000 tonnes of wheat.

Stocks
India, one of the world's leading producers and consumers of wheat, rice, sugar and vegetable oils, banned non-basmati rice exports in 2008 and wheat shipments in 2007 to improve domestic supplies, but it allowed small quantities to be shipped to neighbouring countries including Bangladesh and Nepal under the Diplomatic Deal.

India's grain stocks have increased after four successive strong harvests of wheat, but the government, struggling to calm inflation and facing street protests against rising prices, has not allowed free export of wheat and rice.

Its wheat stocks on July 1 had risen to 33.6 million tonnes from 17.1 million tonnes a year ago, while rice inventory jumped to 24.3 million tonnes from 9.8 million.

The government officials say if rice output from this year's summer-sown crop is good, India may further ease controls on grain exports.

Source : fnbnews.com