Oct. 6 (Bloomberg) -- India, the world’s second-biggest producer of wheat, won’t end a ban on exports of the cereal to avoid food shortages after drought and floods damaged crops of rice and sugar cane.
“There is a need to conserve grains within the country,” Junior Food Minister K.V. Thomas told reporters in New Delhi today. “We want to restrict exports.”
India, which last imported wheat in 2007 and this year became a net buyer of sugar, wants to ensure adequate food supplies after the driest monsoon rains in more than three decades caused a drought in almost half the country. Recent floods in the southern states may further cut cane and rice output, said Thomas.
The monsoon-sown rice output will fall 10 million tons from last year’s record as inadequate rainfall forced farmers to pare acreage by 6.1 million hectares. Duty-free purchases of refined sugar will be permitted until May or June, extending an earlier exemption, to bolster supplies, Farm Minister Sharad Pawar said last month. India may have a shortage of 8 million tons in 2009- 10 season, according to Czarnikow Group Ltd.
The government will “very soon” decide on cutting import duties on rice, currently at 70 percent, and plans to release as much as 1 million tons of wheat to states between October and March to contain prices, he said.
The country has bought record 30 million tons of rice and 25.1 million tons of wheat from farmers this year, and there won’t be shortages of food grain this year, according to Pawar.
The government, the biggest buyer of food crops, purchases cereals such as rice and wheat at guaranteed prices from farmers for sale to the poor at subsidized rates. The assured prices are meant to protect farmers from distress sales in the open market.
Exports of wheat were halted in February 2007 and overseas sales of non-basmati rice on April 1, 2008.
Source : Bloomberg.com