Government hikes rice export price, asks traders to report wheat purchases

The government has raised the minimum export price for non-basmati rice to $650 per tonne (fob) from $500, in a move to slow down exports.

The Directorate General of Foreign Trade (DGFT), under the commerce ministry, said in a notification dated 5 March on its website that the floor export price of non-basmati rice has been raised to Rs26,000 ($650) a tonne.

The step is aimed at discouraging rice exports and rein in rising domestic prices.

The government had banned exports of all non-basmati rice on October 9, but relaxed it later following protests by traders and allowed sales at a floor price of $425 a tonne.

In December, the government raised the floor price for exports to $500.

The DGFT notification said both basmati and non-basmati rice would now be exported only through four ports - Kandla and Mumbai on the west coast and Kakinada and Kolkata on the east coast.

The government also fixed a minimum export price for basmati rice to the Russian Federation at Rs36,000 ($900) per tonne.

In a bid to check hoarding amidst a global fall in foodgrain supplies, the government also asked traders to report purchases of new season wheat to central and state government officials.

Traders have to report purchases of over 10,000 tonnes of wheat to state governments and those above 25,000 tonnes to the union ministry, a government statement said.

Higher purchases by trading firms are hampering government's efforts to shore up its buffer stocks. The Food Corp of India could procure only 11.5 million tonnes of wheat in 2007, forcing the government to import 1.8 million tonnes.